The Risk Management Mode Of The Large-scale Farmland Transfer

In the process of the gradual improvement of China’s agricultural modernization and the steady progress of urbanization,the proportion of large-scale farmland transfer(LFT)has increased steadily,accompanied by the concentration of the risk of LFT,which leads to the frequent breach of contract phenomenon of large-scale operation entities,and seriously impact and threatens the orderly development of agriculture and rural areas.Therefore,different risk management modes of LFT have been implemented in different regions.Among them,Haimen County,as one of the rural reform pilot areas in Jiangsu Province,the main method of farmland transfer is:the village collective collects the farmer’s land and transfers it to the large-scale operation entities.When the performance risk occurs,the village collective needs to cover the farmers’ loss,which will cause greater pressure on the village collective finance.To protect farmers,reduce the pressure of village collective,and maintain social stability,the government in Haimen County led the pilot about land transfer performance insurance in the whole province starting from performance risks.It’s different from other regions that have implemented the land transfer performance bond insurance,which is mainly insured by large-scale operation entities,paid by insurance companies and obtained premium income,the government in Haimen County has created a unique land transfer performance insurance in the pilot program,the village collective pays premium with the government,the village collective and the insurance company compensate together and the part that exceeds the upper limit of compensation is covered by the government,the government and the insurance company share the premium income.On this basis,The"Access+Insurance+Education" system is formed,which is based on LFT performance insurance,supplemented by LFT access mechanisms,other policy-based agricultural insurance,and the education of LFT the large-scale operation entities.This system has effectively reduced the whole risk of LFT,while controlling the performance risk.A systematic analysis for the risk management mode of LFT in Haimen County("Haimen Mode"),for example,how did this mode come into being?Specifically,how does the government effectively operate this mode,thereby reducing the LFT risk?Compared with other risk management modes,why are the main entities paying premiums for land transfer performance insurance in Haimen County,rather than farmers and large-scale operation entities?Moreover,in the reality that only three compensations occurred during the pilot period of land transfer performance insurance in Haimen County,can the "Haimen Mode"be further simplified?If there is still necessary for land transfer performance insurance,how can it be further optimized?Finally,can the "Haimen Mode" be promoted,or what kind of experience it can provide for the LFT risk management in other regions?There is a great significance for promoting the healthy development of the LFT,achieving agricultural modernization,increasing farmers’ income,and maintaining rural social stability.Existing studies mainly focus on the types,causes and prevention of the LFT risks,mostly for the descriptive analysis at the macro level.Therefore,this study first constructs the risk management analysis framework,which based on the Risk Management Theory;then,taking the "Haimen Mode" as study case,analyzes how the Haimen County formed a"Access+Insurance+Education" LFT risk management mode,and analyzes how the government specifically operates this mode from both the overall design and core implementation(i.e.land transfer performance insurance),so as to reduce the risks;Finally,further explore why the main entities paying premiums for land transfer performance insurance in Haimen County is different from the risk management modes in other regions,and analyze whether the "Haimen Mode" can be simplified,what optimizations can be made,and whether it is generalizable,and so as to find a feasible path to promote the special mode to general policies,and provide policy reference for the effective management of the LFT risk.The results show that:(1)The LFT risks in Haimen County are identified as six aspects,including policy risk,market risk,natural risk,business risk,performance risk,and social risk;The risk sources are divided into four categories,including natural disasters,agricultural product price fluctuations,the inadequate implementation of relevant policies of LFT process,and insufficient management capabilities of large-scale operation entities,which leads to the six risks above;Based on risk measurement,the LFT risk in Haimen County is relatively high and the loss is serious,and it is necessary to take measures to control risks;The main control methods of LFT risk in Haimen County are including loss control(including establishing a land transfer access mechanism,strengthening the education of large-scale operation entities)and risk transfer(including land transfer performance insurance and policy agricultural insurance).However,considering the cost of risk control and the effect of risk reduction,the government adopts "Access+Insurance+Education" as the optimal risk control decision-making combination.In the specific implementation process,the"Haimen Mode" relies on the rural property rights trading platform,and forms a close-loop system of risk management.The operation of the core method(land transfer performance insurance)can fully mobilize the enthusiasm of various entities and ultimately reduce risks.(2)For large-scale operation entities,owing to the front-end land transfer access mechanism plays a role,they will think that their business qualification and strength have been recognized,and paying premiums will increase costs,so they are not willing to insure;For farmers in Haimen County,no matter whether the risk occurs or not,the village collective will cover the land rent,so they are not willing to insure.Therefore,the implementation of "Haimen Mode",the large-scale operation entities and farmers cannot pay premiums;The smooth implementation of land transfer performance insurance benefits from government subsidies for premiums,bottom-out compensation,and benefit sharing with insurance companies(dividing net premiums equally);If the government cancel the subsidies for premium,it will inevitably increase the financial pressure of the village collective,and the government’s cancellation of bottom-up compensation may reduce the enthusiasm of insurance companies.Therefore,the withdrawal of the government is not conducive to the continued advancement of the "Haimen Mode".Although the number of compensations for land transfer performance insurance is small,it can strengthen the supervision of large-scale operation entities by introducing third-party(insurance companies),effectively avoiding land rent arrears and non-performance behaviors,so there is still a need for it.Although the "Haimen Mode" is difficult to simplify further,the government has achieved a Pareto improvement by increasing the insurance company’s compensation ratio and gradually reducing the premium rate based on the new changes in the implementation process(such as the low number of claims and high premium income),and then promoting the optimization of the "Haimen Mode".The current core implementation(land transfer performance insurance)of the "Haimen Mode" only considers the newly-added large-scale transfer land that is traded on the rural property rights trading platform.If the insurance coverage is to be expanded,such as including the existing large-scale transfer and still in the contract period of the stock land.The qualification information of large-scale operation entities needs to be registered through the rural property rights trading platform on the basis of standardizing the transfer contract;Moreover,the formation and development of the "Haimen Mode" is mainly due to the government’s leading of the LFT process and the higher fiscal revenues.Therefore,while drawing on the experience of the "Haimen Mode",other regions still need to fully integrate the local actual conditions to adjust this mode.For example,regions with lower fiscal revenues can selectively adopt the "Haimen Mode",such as the land transfer access mechanism,policy-based agricultural insurance,and strengthening the education of large-scale operation entities.In order to manage the LFT risks better,promote the large-scaled management of farmland appropriately and guarantee the income of farmers in farmland transfer,this study puts forward the following policy suggestions:(1)In the process of LFT risk management,it is necessary to form a systematic risk management mode.(2)Risk management is not a straight-line management process.As a risk manager,the government needs to pay attention to the operation of the risk management mode of LFT,and optimize the risk control methods in the mode timely.