A Research On The Financial Support Mechanism Of The Policy-oriented Agricultural Insurance In China

Agriculture has always been universally recognized as the“fragile industry”with a poor ability to withstand natural disasters. During recent years, a variety of large-scale natural disasters occurred frequently and severely, which led to a serious impact on agricultural production. Solving the problems of agriculture aren’t only to benefit farmers, but also the requirements for the whole social development and the comprehensive implement of the concept of scientific development. So the shortage of agricultural insurance has become increasingly prominent. Agricultural insurance plays a significant role in preventing the agricultural production against all kinds of disaster risk, promoting the development of rural financial market and changing our country agricultural development mode as an important disaster compensation system during risk management. Since eleventh five-year plan, improving the policy-oriented agricultural insurance system, establishing the agriculture reinsurance and catastrophe risk dispersions mechanism and playing fully risk safeguard and economic compensation function in policy-oriented agricultural insurance have always been the important development idea about our country agricultural insurance. In this situation, how to make the policy-oriented agricultural insurance steady and continuous development by financial support becomes a significant research topic. From this aspect, the paper makes a comprehensive in-depth research on theoretical basis, existing problems, effect and mechanism reform of our country policy-oriented agricultural insurance by financial support (including financial subsidies and tax preference). Hope to provide the reference for the establishing and improving the financial support mechanism of policy-oriented agricultural insurance, in order to promote it further development.This paper consists of six parts. The main content and view of each part is as following:Part one:To discuss the research purpose and significance of this paper and to summarize briefly those related literatures on domestic and overseas financial support for policy-oriented agricultural insurance.Part two:Theoretical researches on financial support for policy-oriented agricultural insurance. Firstly, based on the comparing agricultural insurance with policy-oriented agricultural insurance on the respective definition of intension and scope, this paper comes to a conclusion that policy-oriented agricultural insurance has the characteristics of double positive externality, non-profit and non-excludability during some certain business operation. Secondly, this paper makes a brief summarization on development course and the present situation of the policy-oriented agricultural insurance in our country in order to make preparation for the following discussion. Finally, this paper demonstrates the theoretical studies about implementing financial support for policy-oriented agricultural insurance from three aspects below:its role in ensuring agricultural production stable development, its problems about insurance market and the relationship between industry and agriculture during our country current economic environment. By analysis, the author thinks our country should implement financial support for policy-oriented agricultural insurance at present, whether based on the characteristic of policy-oriented agricultural insurance and the market dilemma facing or the requirement of agricultural production development and the benefit policy of the government.Part three:The reference for practice and experience about overseas policy-oriented agricultural insurance by financial support. Considering the policy-oriented agricultural insurance is still in the initial stage in our country and the government implements financial support for it in groping forward. So it’s necessary to learn from foreign agricultural insurance subsidies modes and methods. Through the comparative analysis on the operation models of agricultural insurance development and the methods of financial support to the three typical countries, which are the United States, Canada and Japan, the author deems only providing business support by strengthening the relative legislation, providing financial support by government powerful financial subsidies and providing backing by complete reinsurance mechanism and abundant catastrophe risk compensation fund, could the policy-oriented agricultural insurance develop continuously and steadily under the operation of commercial insurance company. Part four:The researches on existing problems and reforming in carrying out financial support for policy-oriented agricultural insurance in our country. The existing problems through the analysis on current situation of our country agricultural insurance subsidies includes relevant legislation still in blank, the specific financial support presenting short-term characteristics, subsidy standard and methods lacking of scientific plan and reinsurance and catastrophe risk dispersions flawing. By the above analysis, the paper reaches a conclusion that our country should issue the specific regulations in agricultural insurance in order to specify the targets, subsidized coverage and subsidized objects of financial support, construct the multi-level subsidy system suitable for our national conditions and increase gradually the efforts to policy-oriented agricultural insurance according to the development of national strength.Supposing the main subsidized objects of policy-oriented agricultural insurance are eight staple crops and three livestock which related to the national food security and as the basic food and clothing required for people. During this part, the author calculated the funds scale required if government implementing financial support for agricultural insurance on pure premiums, management cost and catastrophe risk fund. The result shows our country has the ability to carry out sufficient subsidies on agricultural insurance, which means it has feasibility for enhancing the subsidized amount and expanding the subsidized coverage.Part five:The studies about the current situations, the existing problems and improvement measures on carrying out tax preference to policy-oriented agricultural insurance. Through the analysis of tax preference, which is a kind of indirect financial support mode for policy-oriented agricultural insurance, on the necessity of implement, the current situations and the existing problems, the author puts forward the improvement measures in this section. The paper comes a conclusion the current existing problems about carrying out tax preference are subsidized coverage small, single tax rate structure, the base of business tax unreasonable and the assessment method of income tax unscientific. So our country should promote the effects on tax preference, improve assessment standard of income tax and adjust tax rate structure in order that tax preference could fundamentally play a financial support role in commercial insurance company operating policy-oriented agricultural insurance. Part six:The summaries on all analysis and researches on the whole article. This paper concludes it provides financial security for ensuring policy-oriented agricultural insurance develop steadily and continuously by taking the measure of financial subsidies together with tax preference.The unique features and innovations of this paper include:1) The perspective of this paper is special. The author chooses financial subsidies and tax preference of policy-oriented agricultural insurance as a specialized subject and thereby makes a series of deep research. Based on the operation of financial subsidies and tax preference, this paper makes specific analysis on the framework of financial support system for our country policy-oriented agricultural insurance and calculate the fund scale required for agricultural insurance subsidies, which compared with other existing literatures makes up for the shortage of quantification researches on how to strength government financial support for agricultural insurance to a certain extent.2) The author proposes to take the agricultural insurance as the main measure against natural disaster risk, gradually reduce and replace the direct relief form on agricultural disaster occurring, which is significant to optimizing the structure and utility of government financial support for agriculture.