Study On The Influence Of Agriculture Policy On The Demand Of Agriculture Insurance:Crowd Out Or Crowd In

Agriculture is the basic industry of the national economy, so steady development of agriculture can lay a solid foundation for the entire economy. However, agriculture is a weak industry, vulnerable to natural disasters. Farmers often suffered heavy losses due to natural disasters, and it tend to make them can not continue next year’s agricultural production, thereby have an negative effect on the stable development of agriculture. This view illustrates that protecting farmers against losses caused by natural disasters is an effective measure to safeguard the smooth development of agriculture.Agricultural insurance as a means of risk financing, can effectively reduce farmers’ losses due to natural disasters, and eventually protect the stability of agricultural production. Therefore, developed agricultural countries give a lot of importance to agricultural insurance, through a variety of fiscal policy to promote the development of their agricultural insurance. In recent years, our government has begun to gradually focus on the development of agricultural insurance, especially agricultural insurance premium subsidies began in 2007, which greatly promoted the development of China’s agricultural insurance market, making China agricultural insurance premium scale ranks the second of the world. In 2012, China promulgated the first Agricultural Insurance Regulations-"Agricultural Insurance Regulations", giving a clear perspective of agricultural insurance development principle, support policies, management practices and regulatory requirements. As can be seen, the Chinese government attaches great importance to the development of agricultural insurance.In addition, economic theory suggests that agriculture has a strong positive externalities, the government can reduce farmers’ cost of production of agricultural products through financial support, and also can effectively improve the supply of agricultural products, then ultimately increase the welfare of the whole society. China has long been used to support the development of agriculture through the Fiscal Policy. Agriculture policies of China’s implementation, there are many measures to improve farmers’ ability to respond to natural disasters, such measures likely to impact farmers’agricultural insurance demand.Agriculture policies affecting farmers’demand for agricultural insurance being studied by many researchers at China and abroad too, but these studies often only study how agricultural insurance premium subsidies affect the farmers’demand of agricultural insurance, and there is no a comprehensive measurement of the effect of different Agriculture policies to the demand for agricultural insurance. Therefore, this paper aims at comprehensive measuring the effect of Fiscal Policy to the farmers’demand for agricultural insurance.Based on this direction, this paper puts predecessors’insurance demand theory on agricultural insurance demand, derived factor and its mechanism of agricultural insurance demand. Subsequently, this paper comprehensive analyze the impact of Agriculture policies to farmers demand for agricultural insurance. The results show that Agriculture policies with the function of prevention disaster and compensation are crowding out famers’agricultural insurance demand. On the other hand, agricultural insurance premium subsidy significant crowd in famers’demand for agricultural insurance. Next, this paper confirmed the Agriculture policies indeed affect the demand for agricultural insurance through using the recent decades’data to empirical test. This part mainly including two steps:First, combine Mathematical Statistics Analysis with other scholars’ studies, confirmed that, in recent years, the agricultural insurance premium subsidy policy indeed crowd in farmers’demand for agricultural insurance. Secondly, the paper uses panel data, by building multiple linear regression model confirmed other Agriculture policies is indeed crowd out tamers’ agricultural insurance demand. Thus, we can draw that under the background of the prosperity of agricultural insurance, there are still negative factors to the development of it. In addition, the study also shows that the presence of financial funds inefficiencies in spending on agriculture. At the end of this paper, I give some proposals to improve the development of China’s agricultural insurance, while helping to enhance the efficiency of financial support for agriculture.