Premium Rating For Crop Revenue Insurance In China

The document No.1 of the Central Committee in 2019 pointed out the strategic deployment of priority development of agriculture.It mentioned many times that we should promote the exploration and innovation of agricultural insurance,exploring the pilot project of crop revenue insurance,and supporting agriculture and benefiting farmers through agricultural insurance to promote the stable development of agricultural economy.At present,the main type of agricultural insurances are production insurance and price insurance in China,which can only insure the risk of reducing production or pricing fluctuation of.The risk cannot be totally guaranteed.Crop revenue insurance can comprehensively guarantee the output risk and price risk,provide more comprehensive risk protection for farmers,and then promote the stable development of China’s agricultural economy.Pricing is the core of the design of crop revenue insurance products.This paper studies the related issues on the determination of crop revenue insurance premium rate.Taking Corn in Hebei Province as an example,this paper uses HP filter,VAR,impulse response analysis and other methods to analyze the revenue risk of Corn farmers in Hebei Province from the two dimensions of Corn Yield and price fluctuation,as well as the cost-benefit situation.The results show that corn farmers in Hebei Province are facing greater risk of yield reduction and price fluctuation,and the cost-benefit of corn farmers in Hebei Province shows a decreasing trend year by year.The cost of corn farmers planting is high,the revenue is low,the risk of agricultural production and operation is high,and the revenue security of farmer is low.Farmers in China are in urgent need of comprehensive risk guarantee tools to help their agricultural operations to obtain stable returns.There is a huge potential demand for agricultural revenue insurance in China.Corn farmers in Hebei Province are facing huge yield risks.The fluctuation cycle expansion-contraction ratio of Corn yield series was 0.88,showing the characteristics of shrinkage as a whole and the trend of large-cycle nested small-cycle.Natural disasters had a significant negative impact on Corn Yield in Hebei Province.The risk of Corn yield reduction caused by drought was the greatest;Corn farmers in Hebei Province are facing severe price risks.The fluctuation period of Corn price series is 1.04,showing the characteristics of expansion as a whole;the change of the cost of agricultural means of production has a positive impact on Corn price and has a long time lag;when the cost of agricultural means of production rises by 1%,the price of Corn will rise by 0.6%.The fluctuation of International Corn price will cause a significant co-impact on domestic Corn price in a short time,when the international Corn price rises by 1%.The increase of 1% will bring 0.47% rise in domestic corn price,and economic changes will buffer the fluctuation of corn price from positive to negative,with a long time lag.The cost-benefit of Corn farmers in Hebei Province shows a decreasing trend year by year.The cost of planting is high and the revenue is low.The farmers can not obtain stable crop revenue,and the risk of agricultural production and operation is high.The case study of the pilot project of agricultural product revenue insurance shows that the Corn revenue insurance carried out in Huanan County has effectively guaranteed the revenue of farmers’ grain production,guaranteed the stable revenue level of farmers,and achieved good results.There is a huge potential demand for crop revenue insurance in China.The correlation coefficient of Corn Yield and price series in Hebei Province is 1.35e-06.Under the 70-90% guarantee level,the premium rate of Corn revenue insurance is between 1.8% and 6.3%,and the premium rate of crop revenue insurance is lower than that of Yield Insurance and price index insurance.Finally,the policy suggestions for developing crop revenue insurance in China which are putting forward based on the practical experience of developed countries:(1)establishing agricultural information collection base;(2)perfecting the subsidy policy of crop revenue insurance;(3)dividing risk regions;(4)establishing multi-level risk decentralization mechanism.(5)accelerating the development and perfection of agricultural futures market;...