Research On The Application Of "Insurance+Future" Mode In The Price Risk Management Of Agricultural Product In China

The instability of the price of agricultural products is one of the main factors that restricts the development of the rural economy.One of the key to solve the "Agriculture,Countryside and Farmer" issues is to ensure the steady growth of the farmers' income.The traditional agricultural insurance provides protection to the natural disasters,accidents and other risks in the process of agricultural production,but agricultural products prices.China had implemented the Minimum Purchase Price and the Stockpiling Policy in 2008.However,with the development of the market economy and the process of globalization,the traditional policy is no longer applicable.The Stockpiling Policy for some kind of agricultural products have also been stepped down from the history.The market tools are used to solve the problem of price risk gradually.In recent years,the price index insurance is developed for some of agricultural products.It protects farmers' income to some extent,but the insurance companies have to take great risk and there is no effective way to spread the risk.In august 2015,Dalian Commodity Exchange launched "Insurance + Futures" Model pilot,the model is the one that the Insurance Company underwrites agricultural price risk from farmers,and then uses the futures market to hedge risk.On the one hand,the model uses the protection function of insurance and the dispersing risk function of the futures market to reduce the risk from agricultural products prices changing.On the other hand,it effectively disperses the risk that insurance company underwent by futures market and the insurance funds are indirectly introduced to futures market to promote the development of futures market.Expanding “Insurance + Futures” pilot steadily was clearly stated by “the improvement of the insurance system” of 2016 Document NO.1 of the Central Government,it has given strong support in the policy.The time of "Insurance + Future" Mode implementation is very short in China.The mode is in the pilot phase currently.Although it has obvious advantages,there are many problems in the progress of implementation.This paper is divided into five parts to analyze the risk of agricultural products price in "Insurance + Futures" Model.In the first part,the background of the "Insurance + Futures" Model is presented,the domestic and foreign literature is summarized and the significance of this paper is put forward.In the second part,this paper analyses the theoretical basis of the model mainly from three aspects,include the special nature of the price risk of agricultural products,the operation mechanism of the "Insurance + Futures" Mode and the necessity and feasibility of the implementation.In the third part,this paper summarizes the current situation of "Insurance + Futures" Model in our country and puts forward the problems in current situation.In the fourth part,it takes the Corn Futures Prices Insurance as an example,which is the first futures price insurance of agricultural products,to analysis the application,operation process,status and insufficient of this model.In the fifth part,combined with the problems and deficiencies mentioned above,the paper puts forward some suggestions for the implementation of the "Insurance + Futures" Model in China.In this paper,the research on "Insurance + Futures" Model is based upon the status of agricultural products price insurance in our country,it has high practical value and can provide a comprehensive reference for the implementation of the model in our country.