Study On China's Agricultural Catastrophe Risk Diversification Mechanism

Agriculture is China's weak industry and it is also the most serious destroyed industry of natural disasters. China is one of the countries in the world of suffering the most serious agricultural catastrophe, and annual agricultural catastrophe caused huge losses in China's agricultural production and people's lives, which severely restricts China's agricultural and rural economical development, thereby affects the healthy development of the national economy. As China's agriculture developed extensively and professionally, agriculture catastrophic risk is much more frequently happened and results in much more loss. However, Chinese insurance and reinsurance market in the agriculture has been in a state of low efficiency, so the insurance and reinsurance lack of active management of agricultural insurance, and most of the agricultural catastrophe losses will ultimately rely on farmers themselves and the Government's disaster relief. Therefore, it is easy to see the current agricultural catastrophe risk insurance mechanism is not robust; the diversification mechanism single and ability against catastrophic risks is vulnerable. In recent years, countries have gradually increased the investment in the "three rural", particularly for agricultural reinsurance system, which result in the dramatic increase in the coverage of agricultural insurance, while agricultural catastrophe risk diversification mechanism shows increasingly obvious shortcomings.Based on our current agricultural catastrophe risk dispersion retroactive analysis, we summed up China's current limitations of agricultural catastrophe risk diversification mechanism.; meanwhile we select and analyze the three typical agricultural Catastrophe risk diversification mechanisms of the United States, Mexico and Japan, to summary the foreign agricultural catastrophe risk insurance model and draw on the experience of their success; moreover considering the shortcomings of China's current agricultural catastrophe risk insurance system and other aspects of the actual situation of China's insurance system, we design for the basic framework of China's agriculture catastrophe risk diversification mechanism on the basis of the cooperation between the government and the market.The main conclusions are as follows:a. From the view of the policy-oriented agricultural insurance pilot catastrophe risk diversification models for exploration, China's agricultural development catastrophe must adhere to government support and market combined with the road, according to local conditions, pilot, accumulating experience, gradually. From the analysis on China's agricultural catastrophe that:our current catastrophe reinsurance and catastrophe securitization products are underdeveloped and can not meet the requirements of agricultural catastrophe risk diversification, but also illustrates the potential of agriculture in China's huge demand for catastrophe insurance.b. By analysis on catastrophe risk diversification of foreign agricultural research, with strong legislative protection, the development of agricultural catastrophe insurance in China need to go with mandatory and voluntary way, as well as strong government financial subsidies, through the establishment of a special re-insurance agencies and re-insurance fund guarantee operability of the mechanism.c. Based on the fact of our weak agricultural foundation and wide range coverage, separately settlement of national and provincial agricultural catastrophe fund will better cover the shortage of entirely risk burden of the central government's. Therefore, it will promote the various regions and provinces to better fulfill catastrophe risk-sharing responsibilities and constantly perfect the regional agricultural catastrophe risk insurance mechanism. Our government should establish the catastrophic risk diversification model which is government guided, business operated, and financial supported, reinsurance and capital market supported. And also we should form the agricultural catastrophe risk diversification mechanism combined with policy and commercial, which can effectively enhance the agriculture's capability against catastrophic risks.