A Study On The Legal System Of Agricultural Insurance Subsidy

Agricultural insurance subsidy contains the subsidies and the allowances for the policyholders and the insurers of agricultural insurance provided by the Government in the form of financial funds, aiming to promote agricultural production and maintain the stability of the agricultural insurance business. As an essential component of agricultural insurance system, the basic function of the agricultural insurance subsidy is to make up for agricultural insurance market failure, and promote the healthy development of the agricultural insurance market. In addition, agricultural insurance subsidy plays an important role in reducing governments'pressure on disaster-relief, instructing the agricultural production restructuring. Taking the relevant practices from home and abroad into consideration, the agricultural insurance subsidy should be implemented gradually according to our capability, should be shared by government at all levels, and should be operated with effective supervision, in combination of universality and selectivity. The subjects of legal relations in agricultural insurance involve two problems: who supplies and to whom compensate. Regarding of the particularity of agricultural risks, the policyholders and the insurers are undoubtedly the demand side of the subsidy. According to the principle of "who benefits, who pays", besides the government, the banking industry should also be the supply side of agricultural insurance subsidy. The ways of agricultural insurance subsidy include premium subsidies, subsidies for the operation and management costs, reinsurance subsidies and tax incentives, which is stipulated clearly by relevant legislation in our country. Due to financial constraints, it is impossible to provide subsidy to all kinds of agricultural products in a short term, therefore, the current focus should be given to the food and crops, livestock products and aquatic products closely linked with people's daily lives, and the agricultural products with regional characteristics as well. With economic development, China should increase its input to agricultural insurance year by year, and the overall size of agricultural insurance subsidy should not be less than 1% of agricultural added value. The sources of the agricultural insurance funds includes three channels: restructuring the financial expenditure to increase the Fund for Financial Support of Agriculture, restructuring the Fund for Financial Support of Agriculture to curtail direct subsidies to the prices of agricultural products, and financing from the capital market. The operation of the subsidy funds has a bearing on the implementation of the agricultural insurance, so we should set up an independent Agricultural Risk Management Authority out of the Insurance Regulatory Commission, responsible for funding applications and allocation, supervision on relevant acts of the policyholders, the insurers and government departments.