| Agricultural insurance has long been considered as a powerful poverty-relieve weapon supported by World Trade Organization (WTO) and also utilized as a very important non-price agricultural protection tool. Nevertheless, it has been experienced a bumpy road in China. In 2004, China gradually started its policy-oriented agricultural insurance program experiment. However, this undertaking did not move forward smoothly largely due to the unitary level of crop insurance coverage which significantly constrained farmers'effective demand for agricultural insurance program. Thus, there exists a big gap between China's current unitary coverage of agricultural crop insurance and well-developed international agricultural insurance programs abroad. This gap primarily exhibits that the pure agricultural insurance premium in China does not cover those potential catastrophic losses, thus it has been caused a varies degree of the suspicious as to the rationality and effectiveness as well of the Chinese government agricultural insurance premium subsidy policy. In addition, China has not developed a sound theory and applicable actuarial method to be used in balancing triple-party benefits involving with government, company and agricultural household. In 2010 Third conference of the 11th National People's Congress, Premier Wen Jiabao proposed:"to accelerate agricultural insurance program development." Therefore, along with the expanding agricultural insurance program experiment in China it is imperative and the upmost for China to be able to accurately determine appropriate agricultural insurance premium price. Apparently, this is the key for the Chinese agricultural insurance program to be success in the near future.In this study, the author tried to establish multiple levels of crop insurance premium price under multiple peril crop insurance (MPCI) program which has three key issues to be resolved: 1) to establish some fundamental theories and methods to be used in agricultural crop insurance policy-making; 2) to evaluate farmers'recognition of production risk and agricultural household's willingness to pay for governmentally-supported crop insurance program; and 3) to determine appropriate level of pure crop insurance premium price under multiple insurance coverage, farmer's actual premium payment, as well as government subsidy and amount of required government reserve fund be utilized to run agricultural crop insurance program, etc.Through an exhaustive literature review on the difference between China's and foreign nations'agricultural insurance programs, it was recognized that the survival analysis mode could be a breakthrough method that can be effectively used for determining a unit area of crop production risk and agricultural insurance premium price determination. First of all, in light of application of externality theory in agricultural insurance, a break-even principle and utility maximization theory, this study evaluated an optimal level of government subsidy based on the perspectives and interests of three types of clients, including government, insurance company and household. It was found that there is a serious of problem by adopting a single insurance premium program and it also realized that the crop insurance coverage level and expected loss risks are the two key elements to be considered in crop insurance premium establishment by applying the statistical insurance actuarial analysis. Following that, several mathematical formulas used for risk loss measurements are derived under the survival analysis framework.Secondly, an empirical study was conducted with regard to the governmentally supported crop insurance program in China. Through which various types of crop production risks were identified, and those insurable types of risks were recognized. A premium-indemnity error rectified model was established to measure the government contribution to policy-oriented agricultural insurance market. Finally, a survey was conducted to investigate famers'risk recognition in crop production and their willingness to pay for the crop insurance premium in Panjin of Liaoning province.Thirdly, based on above research work, the survival analysis method was applied to estimate crop insurance premium price in Panjin, Liaoning province. The survival analysis model was used to determine multiple levels of so-called pure crop insurance premium, then both yield and production cost coverage premium were computed under the MPCI program. Additionally, the pure insurance premium is divided into two parts, thus premium price is split into "type I price" and "type II price" accordingly. Those can be used to support insurance premium establishment, development of crop insurance products, as well as determination of the level of government subsidy according to the farmer-households'risk preferences.Finally, the conclusions were generated based on the empirical case study from which novelty points were summarized, and following up by study limitations and future expected research work discussion. Furthermore, the author proposed several ideas for China agricultural crop insurance policy-making and its improvement in the near future. Not only are those study findings useful for the study area's crop insurance development, but also, it can provide learning lesions for the nationwide government supported agricultural insurance program in terms of research method and applied techniques.
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