Research On The Price Fluctuation Of Pigs And Index Insurance In China

As the basic industry of national economy and people’s livelihood in our country,2016 annual output value of hog industry reached 1.6 trillion yuan,accounting for 56.53% of the animal husbandry output value and 18.57% of the total agricultural output value,equaling to the sum of the main food crop.Since market pricing system reforming in 1985,hog price began to fluctuate frequently affected by market supply and demand,feed price and epidemic situation.In the short term,there have been many surges and crashes,especially after 2007.In order to maintain the stability of pig prices and promote the healthy development of the pig industry,the government has introduced a series of price control policies since July 2007.The fluctuation risk of hog price has become one of the biggest problems in the development of hog industry,and it also makes it more difficult for the government to control the price.In order to solve the problem of the risk of hog price fluctuation,the price index insurance of hog has been piloted all over China since 2013.So this article embarks from the hog price volatility risk analysis,sorting out our country in recent years,the characteristics and the causes of price fluctuation of the hog,on the basis of comparing various provinces and municipalities hog current price index insurance product contract and points out the problem,and finally draw lessons from the United States and Canada related experience,suggest perfecting the hog price index insurance product solutions.The detailed arrangement is as follows:The first part is hog price fluctuation analysis.First using H-P kalman filtering method to analyse trend and cycle of hog price from January 2000 to April 2018,and then perform ARCH-LM test on the hog price by means of the mean equation so as to establish EGARCH(1,1)model to empirically test the asymmetric characteristics of pig price.In the following,the article explain the causes of hog price fluctuations from supply and demand,money supply and economic growth these three aspects.The supply level is mainly analyzed from production cost,breeding structure and epidemic situation,while the demand side is mainly analyzed from the population quantity,the per capita income and the substitute price angle.The Johansen maximum likelihood method is used to check whether there is a co-integration relationship between the price of hog,the price of industrial goods and the nominal exchange rate,the nominal amount of money.Finally,as a measure of economic growth,the consumer price index(CPI)was used as the indicator of economic growth in thecurrent month,and the VAR model was constructed and the impulse response analysis was carried out on the same month.The second part is the analysis of China’s hog price index insurance.This part expounds the background pilot hog price index insurance in our country,on the basis of gathering and comparing the first single hog price index insurance product contract of various provinces and cities,the article analyzes hog price index insurance product design scheme from the participation subject,insurance time limit and claims cycle,compensation and insurance amount.After that,the article briefly introduces the product design and implementation effect of China’s first single hog price index insurance,and finally concluded the existing problems in the development of China’s current hog price index insurance.The third part is China’s hog price index insurance products perfect.This section introduces the concrete implement scheme of the hog price insurance and the hog revenue insurance in the United States and the hog price insurance in Canada as well as supporting the reinsurance system catastrophe risk reserve fund and policy insurance company funded by government providing reinsurance service.Besides,it concludes those excellent experience for reference significance for the development of insurance of our country hog price index,then perfect our country current hog prices index insurance product design schemes combined with the above questions,mainly from the participation subject,insurance time limit and manage compensate cycle,compensation index and insurance costs these four aspects.The conclusions of this study are as follows:First,China’s hog price fluctuation has appeared new characteristics in recent years.Firstly,the trend of the price fluctuation of the hog was negative for the first time between June 2012 and January 2014,and negative growth occurred again between January 2017 and August 2017.Secondly,after 2012,the price fluctuation period of hog in China is no longer about 3 years,and the period of cycle length is 10 months,even 7 months,showing the form of small cycle with large cycle.Finally,the impact of hog market information on the fluctuation of hog price is asymmetric,which leads to the unpredictability of hog price fluctuation.Second,the fluctuation of hog price is affected by many factors.First of all,on the supply side,the changes in the cost of breeding directly lead to the fluctuation of hog prices.On the demand side,with the increase in per capita income,people’s demand for pork shows a trend of first increase and decrease.When income reaches acertain level,people begin to pursue quality rather than quantity.In addition,hog disease and alternative prices also have a certain impact on the price of hog.Secondly,compared with the price of industrial products,the price of hog has a "overshoot" of money supply.Finally,the effect of hog price fluctuation on itself is fast and obvious,and the effect of economic growth on hog price fluctuation is slow and small.Third,China’s hog price index insurance has the problem of a single insurance period and low claims frequency;Compensation index one-sided,ignorance of the problems of the actual situation,this article proposes to safe insurance time limit is hog price index set to three levels 4,5and 6 months,the compensation index should be considered as a cub fee and other expenses such as medical which accounting for the high part.The systematic risk of establishing the relevant reinsurance system and reinsurance institutions to share the price fluctuations of hog is also included in the recommendations.