By Tian Hui, Research Team on “Development of China’s price insurance for agricultural products”, Finance Research Institute of DRC

Research Report No 57, 2015 (Total NO 1460) 2015-12-28

Abstract: At present China’s price insurance is still in a preliminary and experimental stage, which is not only due to few premium scale and limited pilot regions, but also due to inconclusive product elements and various alternative forms in reality. In terms of concrete business pattern, currently the main products are price insurances for vegetables and live pigs. Agreed target prices or price indexes of different areas, enterprises or products vary widely. Most pilot products can get local governments to provide premium subsidies, but there are big differences relating to subsidy proportion, subsidy structure and subsidy sources. However, they share one thing in common, i.e.they all set certain conditions or requirements for underwriting objects in general. In addition, there is an urgent need to solve some common problems during the development of price insurance, including insufficient government subsidies, an ineffective catastrophe sharing mechanism, and difficulties of obtaining information, etc. On the whole, at present the development of China’s price insurance for agricultural products did not copy exactly the patterns or roadmaps of the developed countries like the United States and Canada. China is blazing new trials in its own way.

Key words: price insurance, status quo, problem