Premium Rating For Cotton Revenue Insurance In Xinjiang Uygur Autonomous Region Of China

Xinjiang is the foremost cotton producing area in China,and the income of cotton is the main source of farmers’ income in Xinjiang.After the policy of cotton target price payments was implemented in 2014,the price of cotton turn to the market level and the fluctuation of farmers’ income is increased.The current cotton insurance mainly deals with the risk of cost caused by natural disasters and does not cover the risk of price,and it’s difficult for cotton farmers to meet the need of income risk management.With the end of WTO 15-year protection period,the direct payments of grain,cotton and other agricultural products are gradually turn to "green box" policy."Revenue insurance and the participation of government in income safety net program" is one of the important "green box" policies that China should use reasonably.In United States,revenue insurance has been taken as the main means of dispersing risk,and it provides some reference for China in the aspects of policy design and pricing technology.There are still many theoretical problems for the development of revenue insurance to be solved.At this stage,should we implement the revenue insurance of cotton in Xinjiang?How to assess the volatility of cotton production and price reasonably,and then to calculate the premium rate of revenue insurance?How should the pilot program of cotton revenue insurance be designed?How does the cotton revenue insurance match the current target price payments?For enriching the system of agricultural insurance products and improving our agricultural insurance system,it is great significance to discuss these problems further.Based on the expected utility theory and revenue insurance pricing theory,this article analyses the index selection,pricing method and system construction of revenue insurance by using the econometrics analysis and simulation method.The main research has four contents:In the first part,the economic time series methods were used to analyze the relationship between the cotton futures price and the spot price of cotton in Xinjiang,and investigate the rationality of futures price as the index of revenue insurance.Based on that,the revenue insurance premium rate was measured under four targeted revenue at different guarantee levels with 5 Copula function.In the second part,cotton insurance was compared between China and the United States based the summary of the cotton insurance products in the United States.The matching of cotton revenue insurance and target price payment and its reference to China was discussed as well.In the third part,the logit model was used to analyze the factors that affect the behavior of farmers whether participate in agricultural insurance or not.And the potential demand of farmers for insurance was investigated.In the last part,the cotton revenue insurance system was established and the corresponding suggestions were put forward.Main conclusions:(1)In Xinjiang,the futures price of cotton has the function to discovery the spot price of cotton.The futures price of cotton can be used as price index in the design of cotton revenue insurance.(2)Under the same premium rate,the guarantee of cotton revenue insurance will be higher than the current cost insurance.Considering the different degree of risk in different regions,under the similar guarantee,it is consistent with the characteristics of "higher risk,higher premium rate,and lower risk,lower premium rate",but there are still some differences between risk zoning and insurance zoning.(3)The cotton support policy in United States is tilting toward revenue insurance,and the "green box"trend is obvious.According to the realities of our country,cotton target price payment will play an irreplaceable role in the current and future period,thus we should take the cotton revenue insurance as an important policy tool into the agricultural policy system,give the first place to agricultural insurance,and take target price payment as a supplement.(4)The current insurance products can’t meet the needs of cotton farmers.And farmers,demand for insurance products are diversified.Based on the conclusions,there are some suggestions:put forward the pilot program of cotton revenue insurance steadily,and test in small region;accumulate long series data of cotton yield and market price and improve the futures market of bulk agricultural products;optimize the policy of premium subsidy and make "single subsidy" turn to "fine subsidy";tie the cotton insurance policy and the target price policy together in the long run.