Research On Corn Revenue Insurance And Its Pricing In Shandong Province

At present,China’s agriculture is in the critical period of transition to modern agriculture.The scale and intensification of agricultural production have rapidly risen.In 2017,the state began to deepen the price formation mechanism of important agricultural products and the reform of storage system,and steadily pushed forward the pricing of the corn market reform.Therefore,the natural and market risks in the course of agricultural production is bigger.The existing low-level yield insurance cannot fully meet the needs of agricultural development.The crop revenue insurance for agricultural products takes the production risk and price risk into account,which can provide farmers with a more comprehensive risk protection.In July 2017,the first domestic commercial crop revenue insurance-soybean was formally signed in Zhengzhou,which also indicates crop revenue insurance has become the future development trend of China’s crop insurance.Shandong Province is a major province of corn production in China.The development of corn directly affects the agriculture in Shandong Province.the research on corn revenue insurance in Shandong can not only protect the economic income of corn farmers,but also can stabilize the development of corn planting industry in Shandong Province.Besides,I also hope this research will provide theoretical reference and practical guidance for the work of crop revenue insurance in China.This paper first analyzes the production and price risk of corn and the development of corn insurance in Shandong,and hold that It is necessary and feasible to develop corn revenue insurance.Then,based on the actual development of Shandong Province and the successful experience of the crop revenue insurance in the United States,this article conducts a comprehensive study on the insurance contract design and pricing of corn revenue insurance in Shandong Province.After comparing,it was found that the regional revenue insurance scheme was more suitable for Shandong Province at the current stage.Then It introduce the contract design in detail from the insurance principals,insurance deadlines,and the way of insurance compensation.The study of pricing is mainly based on the corn production and price data from 1990 to 2016 in Shandong Province.Distribution premium,Copula function and Monte Carlo simulation method are used to estimate the premium rate.The empirical results show that the rank correlation coefficient between production and price is-0.09235,indicating that there is a weak negative correlation between the two.In addition,compared with other domestic scholars’ research,premium rate of corn revenue insurance in Shandong Province is a little higher.Finally,it puts forward some suggestions for the future development of corn revenue insurance in Shandong Province: to improve agricultural insurance laws and regulations,to speed up the construction of agricultural product database platform based on counties and cities,to explore the model of “income insurance &futures market” and to construct complementary measures for corn income insurance.