Under The Perspective Of Public Finance In Our Country Agricultural Insurance Business Model Research

As effective means of dispersing and dissolving the agricultural risk and disaster losses and consistenting with WTO Agreement on Agriculture "green box" policy, agricultural insurance is in favor of the recovery of agricultural reproduction, maintaining farmers’ income and promoting the rural economic development in an all-round way, it is the efficient path of major agricultural states in the world to improve and perfect the system of agricultural support and protection. As one of the countries which suffer the most serious agricultural disaster, China should make full use of agricultural insurance to ensure national food security, accelerate agricultural industrialization process, and to take a solid step to push on the development of new socialist countryside. Choosing and constantly improving the appropriate model of agricultural insurance to Chinese condition is crucial to the sustainable development of agricultural insurance.Agricultural insurance management pattern is a research subject which has both theoretical value and practical significance. Theoretically, many scholars in domestic and foreign believe that agricultural insurance is a kind of semi-public goods possessing the stronger externality, and it maintains to increase government spending. However, few scholars in domestic study the choice of agricultural insurance management pattern from the prospects of public finance based on the providing theory of semi-public goods. Practically, in recent years, China continues to push forward the development of agricultural insurance to show its protection for the agricultural production, and have achieved some results. While, since the short time of carrying out a comprehensive agricultural insurance pilot and lacking of experience, the current agricultural insurance in China is still faced with limited coverage; the system construction is far from perfect. So the "Twelfth Five-Year Plan for National Economic and Social Development" and the " Report on the Work of the Government in2011" explicitly require that we should actively develop policy-based agricultural insurance, and continuously improve the agricultural insurance system.The dissertation expresses its idea along the train of theoretical-empirical analysis-international experience-policy and suggestion, and it offers a systematic study of China’s agricultural insurance management pattern. In the theoretical analysis section, this dissertation deeply analyzes the public characteristics of agriculture insurance. According to the theory of public good supply, it presents the classification of agricultural insurance management pattern and a comparative analysis. In the empirical analysis section, the dissertation analyzes the development course of China’s agricultural insurance, the essence of the problem of agricultural insurance management pattern in-depth and some related problems; it selects typical cases of three agricultural insurance management patterns respectively to analyze. On some international experience, the dissertation takes the examples of the United States, Japan, France and the Philippines to have a great insight into the characteristics and practices of agricultural insurance management pattern. As to policy recommendations, by analyzing China’s policy in the agricultural insurance system, the dissertation puts forward the suitable model for China’s agricultural insurance and makes a further expression of improving our financial management system of agricultural insurance subsidies, catastrophe risk disperse mechanism and supporting systems design.Based on the theoretical analysis, empirical analysis and international experience, the main conclusions are as follows:Firstly, because of the fundamental and weak quality of agriculture, the agricultural insurance has externalities in farmers’buying and insurers’providing procedure. Asymmetric information in insurance market induces serious adverse selection and moral hazard. The natural disaster which agricultural production faces is systematic. Agricultural insurance can increase the total welfare of society; the public nature of agricultural insurance products is very prominent.Secondly, the deliveries of public goods include three categories. The first one is direct provision of government production; then the private product goods and government purchase and delivery; third, government offers supporting and privates make production and offering. According to different participative style and intervention, agricultural insurance management pattern can be divided into government-dominated pattern and government-supported pattern; according to different types of entities it includes three categories, commercial insurance company, organizations of mutual assistance and Mutual Insurance Company. Government-dominated management pattern is prone to bring "Cost of Bureaucracy" government-supported business pattern has "Cost of Transaction", each sub-pattern has its advantages and disadvantages.Thirdly, the subsidization system of agriculture insurance can effectively promote the growth of supply and demand for agricultural insurance. The subsidization system of agriculture insurance should not only adhere to the principle of full protection of agricultural insurance functions, but also be in accordance with the principle of guarantee farmers’income to perfect agricultural insurance management pattern and steadily progress in institutional mechanisms at the same time. The standard of subsidize efforts determines the degree of the strength of the public. As for the financial responsibility in the allocation of government subsidies, since, agriculture insurance plays an role in stabilizing agriculture production, ensuring national food security, ensuring economic stability in rural areas, increasing farmers’ income and other functions, and the effectiveness of it covers the whole country, which belongs to a national public goods, in addition, considering the appropriate decentralization of China’s authoritarian system and the total income of the central finance, the central government should bear primary responsibility for financial subsidies.Fourthly, China’s agricultural insurance management pattern experiences from a government-dominated management pattern to the government-supported pattern in a gradual transition process. While China’s Agricultural insurance business achieves greater results, there are still some problems in lagging behind of the construction of the system and the nonstandard behaviors of the stakeholder. On the one hand, agricultural insurance management pattern does not closely combine with the special nature of China, the "big agriculture, small farmers"; On the other hand, the government’s position is uncertainty, the responsibility allocation is not clear in government and markets either and the agricultural insurance system design is not mature.Fifthly, among the three government-supported management patterns of agricultural insurance, commercial insurance company pattern has the capital strength, perfect commercial network, human resource, experience of back-stage management and other advantages. It can spread risks in a broader range in order to meet the Majority Rule in insurance service. But it will spend a lot of money on providing good service, and controlling the moral hazard. Mutual Insurance Company and organizations of mutual assistance possess the characteristics of flexible operation and are easy to control moral hazard, but there are problems about small-scale, capital constraints risk, limited operational area and low degree of specialization and so on. It is not conducive to the widely dispersed of risk, and with the expansion of the operation and scope, its institutional strengths will be gradually weaken.Sixthly, the major experience of successful management pattern in foreign agricultural insurance is as follow. Legislate the special legislation on agriculture insurance, and constantly revise and improve combined with practical; based on domestic agriculture production scale and organization level, we choose the actual choice for own management pattern. In general, the government is not directly involved in the operation of the original insurance business, but mainly provides subsidy of insurance fee, subsidy of management fee, subsidy of reinsurance, preferential tax policy etc. to give policy support; to expand coverage and prevent adverse selection, most of the national agricultural insurance plans for grain crops have some mandatory provisions.Based on the above points, this paper proposes ideas and suggestions to perfect the management pattern of China’s agricultural insurance:China’s agricultural insurance system should be divided into the basic system and the additional system. In the short run, we should gather experiences by inventing new management patterns. While in the long run, we should develop the pattern of "government-supported+corporation-operated" which is consist of agriculture insurance administration, insurance companies and basic service platforms. The government also needs to promote financial subsidies to agricultural insurance system, strengthen the agricultural insurance risk zoning and take other related measures.