The Study on Innovation of China’s Agricultural Catastrophe Risk Insurance Diversification Mechanism SPEAKERS:FENG Xuefeng Jiangsu University

Leading principles  1. The necessity of the innovation of the study  2. Foreign experience of agricultural catastrophe risk diversification mechanism  3. The new ideas of the design of our agricultural catastrophic risk diversification mechanism

1.1 Frequent agricultural catastrophe and huge loss Year Direct economic Losses (0.1 Billion Yuan) Government relief Funds (0.1 Billion Yuan) Percentage (%) southwest Drought Table1 Catastrophe losses and financial disaster relief expenditure for the past 10 years Source: "China Statistical Yearbook", China Civil Affairs Statistical reports, etc

1.2 The imperfect of Agricultural Catastrophe Risk diversification mechanism

 Financial subsidies and the limitation of social assistance  Traditional catastrophe insurance and reinsurance limitations a. The narrow coverage of agricultural insurance b. Capability of the insurance is clearly insufficient c. The immature reinsurance market and limited ability of spread risk

2. Foreign experience of agricultural catastrophe risk diversification mechanism  U.S.A.—A “single-track system” mode of market operation and government regulation  Mexico – an example of private/public partnership with individual participation  Japanese—A combinatorial mode of regional agricultural freemasonry

2.1 U.S.A.—A “single-track system” mode of market operation and government regulation

2.2 Mexico – an example of private/public partnership with individual participation

2.3 Japanese—A combinatorial mode of regional agricultural freemasonry

2.4 Summary  Some ideas and office procedure are as follows: A. The private/public insurance partnerships is a key element for further market improvement B. The government's two-way subsidies C. The importance of the catastrophe funds

3.1 Building ideas of China’s mechanism * government guided, business operated, financial supported, reinsurance and capital market supported China’s Decentralized model* Foreign experience Economic situation Government guidelines 3. The new ideas of the design of our agricultural catastrophic risk diversification mechanism

3.2 Model selection and mechanism design

3.3 The advantages of agricultural catastrophe risk diversification mechanism  The government's two-way subsidies  The establishment of policy-oriented agricultural reinsurance company  The establishment of provincial and national catastrophe fund

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