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Agricultural Insurance Innovation Needs to Be Tailored to the Different Farming Models and Farmers’ Different Demands(No. 133, 2017)


By Zhu Junsheng, Research Institute of Finance, DRC &Ye Minghua, East China Normal University

Research Report No. 133, 2017 (Total. 5208) 2017-10-13

Abstract: In the process of China's agricultural development from traditional small-scale farming to appropriately scale-up operations, the farmers have formed two different management models represented by the new agricultural management entities and the traditional small households. A questionnaire survey was conducted in nine major grain producing provinces in two types of farming groups and comparative analysis results show that the new agricultural management entities have large planting areas, whereas the plant varieties are quite limited with concentrated high risks in face of natural disasters. As a result, the new agricultural management entities are generally aware of the fact that the agricultural insurance is an important way to reduce disaster-induced risks, and their intention and willingness for agricultural insurance procurement are significantly higher than that of the traditional small households. The present agricultural insurance could basically meet the needs of the traditional small households, but is quite beyond the requirement of the new agricultural management entities. In order to satisfy the demands of new agricultural management entities, the agricultural insurance should enlarge its coverage from the traditional small-scale farming with single product system to the new agricultural management entities with diversified and multi-level farming, and the government should increase its support of agricultural insurance services to new agricultural management entities by relying on the moderate scale operation of the new agricultural management entities to innovate the management patterns of agricultural insurance.

Key words: agricultural insurance, new agricultural management entities, traditional small farmers, demand difference