Impact Of Fiscal Subsidy Agricultural Insurance On Farmer's Income In China

Our country is a big agricultural country in the world,agriculture is the important industry of national economy.In our country,the agriculture,countryside and farmers is a fundamental problem in the development of national economy.Since 2004,12 consecutive years about "No.1 document" of central government focused on the "three issues of agriculture",the"three issues of agriculture" had become the center of agriculture work and rural economy.Although the emphasis is different,stabilitying and increasing farmers' income is the center of the"three issues of agriculture".However,our country is one of countries where the natural disaster is very frequency,Natural disasters caused serious losses to farmers.agricultural risk becomes the important factor which threats to agricultural production.To avoid to the risk and safeguard farmers' production,our country advocates to establish agricultural insurance system.In January 2013,<the agricultural insurance regulations>which promulgated by the state council standardized and institutionalized support for agricultural insurance.China's agricultural insurance has been 80 years of history,policy has been in change constantly.Especially in 2007,the ministry of finance promulgated<the central fiscal agricultural insurance premiums for the measures for the administration of pilot>,officially launched the central fiscal subsidy of agricultural insurance in our country,since then,agricultural insurance flourished.When the agricultural insurance avoids the risk of agriculture,can shoulder the burden of stabilitying and increasing farmers' income.Experience from agricultural insurance development higher level of countries shows if the country had no state financial subsidies for agricultural insurance,it is difficult for agricultural insurance to develop.But there are financial subsidies for agricultural insurance,the premium subsidies may have a welfare dissipation effect on farmers which will reduce the farmer's benefits.Many scholars in our country study if agricultural insurance can increase farmers' income after The state financial subsidies,the conclusions are different,this paper studies the influence of the agricultural insurance to the farmers'income,both riches theoretical research system that agricultural insurance affects farmers' income and promotes the healthy development of agricultural insurance,putting forward to the corresponding policy recommendations to increase farmers'income.In theory,this article mainly introduced how the agricultural insurance influences farmers' income and analysis the relationship between agricultural insurance and farmers' income quantitatively,As we know,agricultural insurance had an effect on farmers' income,mainly divided into pre-disaster effect and effect after a disaster,Pre-disaster refers to that farmers who insured agricultural insurance pay premium income to the insurance company,during this period from paying premium income to the agricultural risk accidents,the agricultural insurance has an impact on the farmers' income.Effect after a disaster refers to that the insurance company compensates for the loss of the farmers,enable to help farmers to restore agricultural production activities after the insurance accident happens.In fact,this article is using a ARDL-ECM model.Using the ARDL-ECM model to study that agricultural insurance had an effect on farmers' income in the long-term and short-term,which is the biggest innovations in this paper.ARDL model is a dynamic analysis model and eviews9.0 has a new feature which is ARDL model.As a relatively new method of cointegration test,when we studied some variables has a long-term impact on other variables,especially for small samples,which does not require the variables ChanJie with whole,when there are endogenous variables,estimation is unbiased effective and estimated results robust enough.Based on the empirical phase,the research sample is 13 major grain-producing areas in China(liaoning,jilin,Inner Mongolia,hebei,shandong,jiangxi,hunan,sichuan,henan,hubei,jiangsu,anhui,heilongjiang).In selecting indicators,the indicator which is on behalf of farmers' income of rural households is Agriculture-related income.the indicator which is on behalf of the pre-disaster effect is agricultural insurance development level,with per capita premium,the indicator which is on behalf of effect after a disaster is the agricultural risk level,with loss ratio.Considering that the lack of important variables will lead to deviation estimates,based on C-D production function to determine three important factors of production,the per capital and human capital,the urbanization rate.Using ARDL-ECM model respectively analyses before the fiscal subsidy and after the financial subsidy for agricultural insurance has an effect on farmers' income,through comparatively analysis impact strength and direction,we highlight the role of the central government subsidies.we use ARDL model to study agricultural insurance has a long-term impact on the farmers' income.The empirical results show that Financial subsidies to the agricultural insurance,it's pre-disaster long-term effect has a negative impact on the current farmers' income in the lag phase 1,the long-term effects after a disaster has a negative impact on the farmers' income in the lag phase 1.And fiscal subsidies to the agricultural insurance,it's pre-disaster long-term effect has a negative influence on the current farmers' income in lag phase 2.Long-term effects after a disaster has a positive effect on the current farmers' income in the lag phase 2.By contrast,we found that after the central government subsidies for agricultural insurance premium,before the long-term negative effects of the agricultural insurance to the farmers' income decreased,long-term effect after a disaster into a positive effect,but this positive effect is very limited.Using ECM to study that agricultural insurance has a short-term impact on the farmers' income,the empirical results show that before the fiscal subsidy of agricultural insurance has a positive impact on the farmers' income in pre-disaster,a positive impact on the farmers' income in after a disaster.before Fiscal subsidy of agricultural insurance,its has a positive impact on the farmers' income in post-disaster and a negative impact on farmers' income,by contrast,we found that after the central governrnment subsidies for agricultural insurance premium,the long-term positive effect increases,the long-term negative effect decrease,a.This indicates that the central government subsidies for the agricultural insurance premium has certain effect on income.In this paper,based on the agricultural insurance influences on the farmers'income,we put forward policy proposals to the development of agricultural insurance.