Promoting the Innovation of Agricultural Insurance from the supply side

Agricultural insurance is an important means to avoid natural risk losses, ensure agricultural production and stabilize farmers' income. it is more and more integrated into all aspects of agricultural modernization. it plays an important role in the construction of rural financial system, the adjustment of agricultural industrial structure and the transformation and upgrading. Since 2007, China has gradually increased its financial support to agricultural insurance, promoted the rapid development of agricultural insurance and significantly enhanced its ability to serve agriculture, rural areas and farmers. From 2007 to 2015, the premium income of agricultural insurance increased from more than 5 billion yuan to more than 37 billion yuan, the coverage of major crops expanded from 230 million mu to more than 1.1 billion mu, and agricultural insurance areas were opened to cover all provinces and cities in the country. The 2016 Central Committee document No. 1 proposed that agricultural insurance should be used as an important means to support agriculture, expand the coverage of agricultural insurance, increase the variety of insurance, and improve the level of risk protection. The outline of the 13th five-year Plan also proposed that it is necessary to innovate rural financial services and improve the agricultural insurance system.

At present, great changes have taken place in China's agricultural and rural development environment, there is a mismatch between the original insurance policy and the new demand for agricultural risk management, and the effect of supporting "agriculture, rural areas and farmers" has been weakened. This is mainly shown in two aspects: first, the role of agricultural insurance in risk management of small-scale farmers is limited. In China, agricultural insurance plays an important role in risk management and income support of large-scale farmers, because their main source of income is agricultural production; for a large number of small-scale farmers, the risk management function of agricultural insurance is not obvious, because their agricultural income accounts for a low proportion of total household income, and the proportion of compensation to income is also low. Therefore, for the vast majority of small farmers, the expected income and willingness to participate in insurance are not high. Second, there is a "leakage effect" in financial support, which plays a limited role in supporting the income of farmers. The current agricultural insurance in China is that the state entrusts commercial insurance companies to provide insurance products and services, farmers pay for insurance, insurance companies settle claims, and the government provides subsidies. At present, the proportion of premiums subsidized by the state to agricultural insurance has reached 75% Mur80%. Although the government subsidizes most of the premiums, there is a certain "leakage effect" in the form of financial funds subsidizing premiums. The role of financial funds in supporting agricultural insurance has not been brought into full play.

In order to achieve the goal of further consolidating and upgrading grain production capacity by 2020, effectively ensuring national food security and the supply of important agricultural products, and achieving a well-off standard of living in an all-round way, it is necessary to improve and innovate the agricultural insurance system on the supply side.

First of all, relying on commercial insurance companies, actively develop insurance varieties to meet the needs of new agricultural operators. The new agricultural operators, represented by large farmers and large-scale operators, have large production scale, large investment and high demand for risk management. Therefore, the risk management function of agricultural insurance should be strengthened by giving priority to commercial operation and supplemented by government subsidies. The government should encourage insurance companies to develop insurance products according to the needs of new agricultural operators, and at the same time appropriately increase support.

Secondly, to strengthen the income support for small farmers as the goal of insurance tool innovation, while ensuring food security, the alternative is to cancel the intermediate links to reduce leakage. A special account for agricultural insurance can be set up in the existing bank cards that pay direct subsidies to farmers, farmers pay insurance fees according to the actual insured area, the state finance provides supporting funds, and the two parts of funds are combined into individual accounts and carry out special management. After the occurrence of the disaster, trigger the compensation mechanism, activate the insurance payment procedure, and farmers can withdraw the prescribed amount of compensation from the special account. If the land is transferred due to retirement or other reasons, the balance can be received at one time; those transferred to the land shall re-pay and accumulate the insurance premium, and the upper limit when triggering the indemnity payment shall be the total amount accumulated by the individual account. The trigger mechanism can draw lessons from the idea of index insurance to index the degree of damage, that is, the insurance contract and compensation trigger mechanism can be designed not based on the actual loss, but on the basis of regional average output, rainfall, temperature, satellite images and other parameters.