Study On The Financial Subsidy On Agricultural Insurance In Shanxi Province

From 2004 to 2007, the No.l files of the Central Committee of the Chinese Communist Party made special instructions to the development of agricultural insurance. The system of the policy-based agriculture insurance has gradually been improved. Agriculture is the foundation of national industry and very important in our country, because it is full of high risks and at disadvantage in our country for a long time. Farmers not only face the production of natural disasters, but also the operation risk of market economy, they haven’t advantages to grasp the relationship of the supply and the requirement. So this makes it extremely dangerous for farmers to rely on doing farm work for income. Therefore the agriculture, countryside and farmers’ income are always very important in the economic system of our country. As one of the underdeveloped regions in the western of China, Shanxi province is not only a big agricultural province, but also has serious disasters because of its geographical position. In 2006, the subsidy system on agricultural insurance began to implement in Shanxi province. Then the agricultural insurance has gone very well in Shanxi province. Though the financial allowance system has been gradually established, there are also many unsolved problems.This paper consists of six parts. The main content of each part is as following:The first chapter discusses 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.The second chapter introduces the necessity of the development of the agricultural insurance. The agricultural insurance is neither different from the private goods, nor different from public goods, but the quasi-public goods between the former two goods, which determines the agricultural insurance can’t only depend on the commercial insurance company to operate, and can’t entirely be controlled by the government.The third chapter lists the situation and the development trend of the financial subsidies in the country over some of the past years, the central government try to support agricultural insurance, increases the amount of financial subsidies. The governments at various levels cooperate closely with each other to make agricultural insurance develop gradually. The agricultural insurance protects the farmers against the high level of risks. We must enhance the farmer’s ability to recover from disasters. This chapter then introduces some classic modes of the financial subsidies in our country, such as Beijing Mode, Heilongjiang Mode, Zhejiang Mode and Shanghai Mode. These modes have those own characteristics. We can learn from these advanced experiences.The fourth chapter mainly introduces the operation of the financial subsidies in Shanxi province. This paper respectively analyzes the current situation from the point of view of the farmers and the insurance company. Then it introduces the new policy of financial subsidies of Shanxi province in 2011. This chapter points out that the financial subsidies have achieved great development these years. But there are also many defects of the financial subsidies in Shanxi province.The fifth chapter empirically analyses the financial subsidies in Shanxi province. Considering the experimental policy and the facts of the agricultural production in Shanxi province, the thesis analyzes how the fiscal subsidy affects the payment ability of the government and the farmers. And this chapter finds out that even for the attendance rate of the agricultural insurance of 60%, the government of Shanxi province still has the payment ability, but the payment ability of the farmers is limited. If the government improves the fiscal subsidy, it can lighten the farmers’ burden, improve the attendance rate of the agricultural insurance, and increase the agricultural insurance’s effective demand. On the current fiscal subsidy scale, Shanxi province can broaden the pilot scale, increase the pilot species of the fiscal subsidy, and properly improve the fiscal subsidy rate.On the basis of summarizing the experience of agricultural insurance of our country and other countries, the sixth chapter gives advice as to how to establish the fiscal subsidy system of agricultural insurance in Shanxi province. As to the subsidy items, it is necessary to subsidize those main farming products which are related to the national welfare and people’s livelihood. With respect to subsidy mode, it is necessary to offer the premium subsidy. As for subsidy standard, it is necessary to consider different situations to make different subsidy standards so as to raise the financial subsidies from many outlets and consummate the other facilities which have direct links with fiscal subsidy system of agricultural insurance. In doing so, it is of importance to play the leading role in the agricultural insurance, and to ensure that policy-oriented agricultural insurance can develop healthily in Shanxi province.