A Study On Agricultural Catastrophe Risk Diversification Mechanism Of China

China is a vast agricultural country, and it’s also suffered frequently natural disasters.Develop and standardize agriculture catastrophe risk diversification mechanism is animportant guarantee of protection the interests of farmers and achieve sustainabledevelopment of agriculture. The agriculture risk’s feature is diversity, dispersion andseasonal, relative to other industries, agriculture risk exceeds any other industry in termsof number of risks, frequency and difficulty of managing, risk is difficult to effectivelycontrol, especially catastrophe risk. For a long time, our agricultural management hasbeen ignoring researching and using agricultural risk management, especiallyagricultural catastrophe risk management, lead to lag behind in terms of the agriculturaloperation mode, concepts and methods. Innovative of agricultural catastrophe riskdiversification mechanism can improve the management level and management abilityof agricultural catastrophe risk, stabilize the fundamental position of agriculture in thenational economy, and promote the sustainable development of agriculture.This article started from analyzing the theory of agricultural catastrophe risk, thenanalyzed the status and problems of China’s agricultural catastrophe risk diversificationmechanism, In premise of fully absorb the advanced experience of foreign agriculturalcatastrophe risk diversification, established a basic framework of government inducibleagriculture catastrophe risk diversification mechanism, analyzed the diversificationpathways of agricultural catastrophe risk in this framework, and proposed somemeasures to improve this mechanisms. Finally, carry out an empirical research aboutrisk estimation model and pricing, which is based on annual production data of tobaccoin Yunnan.The main conclusions of thin paper are as follows:1) Agricultural catastrophe riskwould bring catastrophic impact to society, so agricultural catastrophe risk should begiven adequate attention, research the characteristics of the agricultural catastrophe risksufficiently;2) The normal functioning of the agricultural insurance market are facingthe threat of catastrophic risk，the solution lies in establishing an effective agriculturalcatastrophe risk diversification mechanism;3) We should establish the governmentinducible agricultural catastrophe risk diversification mechanism; establish specializedagricultural reinsurance institutions, establish agricultural catastrophe funds in nationaland provincial levels, and explore the use of agricultural catastrophe securitization to diversification risk, the government does not participate in the agricultural insurancebusiness, but guide the normal operation of agricultural insurance market by reasonablepolicy;4) Agricultural catastrophe bonds contain catastrophe risk, establish an effectivecatastrophe risk estimation model is the key to issue agricultural catastrophe bond.According to bond pricing model and years of spot rates, simulate multi-yearcatastrophe bond price, can be a reference for Agricultural catastrophe bond issuancePricing.