A Study On Financial Subsidies' Impact On The Agricultural Insurance Market

As the fundamental industry of the national economy, agriculture facing all kinds of nature risks and market risks in the process of agricultural production and management, in particular, frequent natural disasters have seriously affected the healthy development of agriculture and farmers income. However, the development of agricultural insurance in China has been slow fluctuations of the low level of development. This not only doesn't meet the status of agricultural development in China, but also can not meet the increasing competition of international agricultural market.From the development process of China's agricultural insurance, agricultural insurance development depends on the manner of government intervention and support efforts largely. The nature of the agricultural insurance make it a policy of insurance, agricultural insurance can not be operated by commerce insurance company entirely, the Government's financial support is necessary condition to the development of agricultural insurance market, foreign agricultural insurance practice has proved this point. Since 2004, agricultural insurance in the country with the gradual expansion, the financial subsidies of agricultural insurance has been an important role in all levels of government recognition. In 2007, the first time the central government subsidies for agricultural insurance, making a significant development of agricultural insurance. In recent years, government efforts to support agricultural insurance are growing. However, with the development of trials of policy-supported agricultural insurance, the insurance coverage and covering space expand further, policy-supported agricultural insurance face some difficulties and problems to be solved. How does agricultural insurance needed? If agricultural insurance subsidies affect farmers to buy agricultural insurance? How much impact? Continue to increase the insurance premium subsidies whether or not can achieve long-term balance of supply and demand? How to build financial subsidies of agricultural insurance system? Analysis of these issues to promote the development of agricultural insurance in China has important theoretical and practical significance.In this paper, based on previews research, first on the course of development of agricultural insurance in China were reviewed, focusing on the policies implemented since 2004, agricultural insurance pilot program, and the experience gained in these stages and problems were summarized and summarized. And financial subsidies from the microscopic analysis of the impact of farmers to buy agricultural insurance, financial subsidies from the macro analysis of supply and demand of agricultural insurance market, the overall impact, according to drawn from the analysis of financial subsidies to promote the healthy development of agricultural insurance market is very important effect. Finally, give a reasonable suggestion to China's policy of financial subsidies for agricultural insurance system.This paper is divided into five parts:(1) A brief review of the development of agricultural insurance in China since the founding of New China, and summarized the experience gained and lessons learned. (2) Focuses on introducing the basic situation of the new trials of policy-supported agricultural insurance in China since 2004, the experience gained and the main problems. From the historical development of agricultural insurance, agricultural insurance development depends on the manner of government intervention and support efforts largely. (3) Research on financial subsidies' impact on farmers to buy agricultural insurance from the view of microcosmic, first, introduce the basic situation of trials of policy-supported agricultural insurance in Hubei province, then based on the data from farmers, use Logit models to research the effects of insurance subsidies since 2004 in Hubei province. We conclude that the proportion of farmers on the expected premium subsidies to farmers to buy agricultural insurance has a significant impact. (4) Rerearch on financial subsidies' impact on the agricultural insurance market from the view of macroscopic, using cointegration and error correction model to analysis time series about premium revenue and payment expenditure from 1984 to 2009, and demonstrated the relationship between premium revenue and payment expenditure. Since 2004 government put subsidies for agricultural insurance policy in place, data mutation testing, found that a mutation in 2004, before and after the model structure has changed. Financial subsidies to promote the healthy development of agricultural insurance market (5) Give advising and suggesting about complete the policy of policy-supported agricultural insurance, promote China's agricultural insurance policy effects of the financial subsidies to utility maximization, to achieve targets of the government to support agricultural development and increasing farmers revenue, promote China's agriculture sustainable development.