Weather Index Insurance Design For Cotton Farmer In North Of Xinjiang, China-A Case On Cotton Low Temperature

Under the background of global climate change, a great numbers of natural catastrophes have happened for recent years. Xinjiang Province, located in the inland of China, is very poor in ecological environment. Natural disasters take place frequently and cause severe damage to the society. Cotton, as the main pillar industry in Xinjiang, easily suffers from the influence of heat condition. Xinjiang is totally in a low heat level, especially the north part of Xinjiang Production and Construction Corps. Agricultural insurance is designed to avoid those natural catastrophes, it can transfer the agricultural disaster risk market. Traditional policy agricultural insurance has developed quickly, but its disadvantages are more and more obvious. The appearance of weather index insurance may help to solve the problem causing by traditional policy agricultural insurance, such as high risk, asymmetric information and high costs. Xinjiang Production and Construction Corps already have many kinds of insurances except low temperature insurance which consists of the main disaster here. The existing researches tend to developed regions, not developing areas like Xinjiang. So our research pays attention on low temperature insurance and bases on the pilot in sixth and eighth agricultural division in Xinjiang to discuss feasibility of weather index insurance in north part of Xinjiang Production and Construction Corps and try to find several low temperature indexes and determine the compensation standard.The main conclusions are as follows:(1) Traditional agricultural insurance experience can improve the purchase willing of weather index. The purchase willing of weather index increases by the past experience. People who buy traditional agricultural insurance more frequently, tend to buy both of the two insurances. Those two insurances are complementation but not substitution. People who are not satisfied with traditional agricultural insurance consider that they can’t get the premium and also don’t trust the insurance company. Thus, they think it’s not necessary to buy insurance, but weather index insurance can improve this situation.(2) Cotton in north part of Xinjiang Production and Construction Corps have five growth stages in which seeding, cotton at flowering and boll opening stages are the most vulnerable ones to suffer from the low temperature and cause the loss of cotton yield. The temperature remains low during the seeding and boll opening stages. Cotton at flowering stage usually has good heat condition, but all of a sudden cooling during this period, it will cause severe damage of yield.(3) Sixth and eighth agricultural division in Xinjiang suffered from 11 and 10years of the total 23years, which means meteorological disasters cause huge loss of cotton. Our research chooses upper three stages and uses several temperature indexes to find the relationship between yield and low temperature. This paper uses the method called multiple linear regressions to get the low temperature indexes and get four indexes.(4) For the sixth agricultural division in Xinjiang, this paper chooses ≥15℃ accumulated temperature of seeding as 345℃ and the largest drop of maximum temperature of cotton at flowering as 6.8℃ to be the trigger. For the eighth agricultural division in Xinjiang, this paper chooses the largest drop of mean temperature of cotton at flowering as 2.5℃ and ≥10℃ accumulated temperature at 448℃ of boll opening stage as the trigger.