Changes and innovations of China's agricultural insurance system after the founding of New China

After the founding of New China, agricultural insurance experienced rapid development in the initial stage, stagnation in the middle stage and sustained development since the reform and opening up. Government intervention is closely related to every stage of the development of agricultural insurance. The rise, rapid development, sustained and stable development, shrinkage and suspension of agricultural insurance are all direct or indirect results of government intervention.

(1) The rapid development of agricultural insurance in the early days of New China: From 1949 to 1958

In the early days of the founding of the People's Republic of China, the development of rural economy faced a situation in which everything was in ruins. Therefore, the main purpose of rural economic system arrangement at that time was to promote the recovery of agricultural production and open the way for the recovery of the whole national economy and the implementation of the strategy of inclined development of heavy industry. In 1949, China People's Insurance Company (hereinafter referred to as PICC China) was established, and quickly established branches all over the country. China is a big agricultural country, agriculture has always been a pillar industry, and the agricultural population accounts for the vast majority of the country's population. In order to restore agricultural production damaged in the war and consolidate the achievements of land reform, the newly established People's Insurance Company of China put agricultural insurance on the agenda in 195. The initial pilot agricultural insurance mainly used the model and experience of the former Soviet Union for reference, and it was combined with the work of the administrative center at that time-land reform and resisting US aggression and aiding Korea, and was promoted in the form of political tasks.

(2) The stagnation of China's agricultural insurance development in the middle period: from 1959 to 1981

With the rapid recovery of the national economy in the early days of the founding of the People's Republic of China and the full completion of the first five-year plan, the ideological rashness and industrialization impulse of decision-makers began to rise. With the basic completion of socialist transformation, the state has achieved a monopoly on the form of property rights. At that time, all walks of life, including the government, believed that insurance was a meaningless transfer of funds between enterprises owned by the whole people. Insurance replaced the function of finance and only increased the management cost of the country. At the same time, with the completion of the rural cooperative process, rural private property rights have been transformed into state-controlled monopoly property rights arrangements, and people's communes have assumed the functions of preventing risks, sharing losses and ensuring agricultural production, so rural insurance is no longer necessary. In this way, whether in rural areas or cities, insurance has lost its foundation for existence and development. Therefore, in December 1958, the government decided to stop the domestic insurance business immediately. Since then, the domestic insurance business has been completely withdrawn, and the rural insurance business has been forced to stop. This time, it stopped until 1981.

(3) The vigorous development of agricultural insurance during the market-oriented reform: From 1982 to 1992, after the Third Plenary Session of the Eleventh Central Committee, China began to establish and generally implement the agricultural household contract responsibility system, eventually abolishing the people's commune system, and gradually improving the agricultural and rural economic systems. In 1982, the State Council made a series of important decisions for the development of agricultural insurance in the new period. In February 1982, the People's Bank of China, which was approved by the State Council, pointed out: "In order to adapt to the new situation of rural economic development, how to serve 8 million farmers in insurance work is a subject that must be paid attention to. On the basis of investigation and study, in accordance with the needs of implementing rural economic policies and starting from the actual situation in various places, we should actively create conditions, pay close attention to preparations, and gradually pilot rural property insurance, animal husbandry insurance and other businesses. " At this point, China's agricultural insurance has opened a new chapter under the curtain of reform and opening up after a 24-year gap in 1958, and the rural security system in China has gradually shifted from state relief to agricultural insurance. In the same year, PICC China resumed the pilot agricultural insurance in an all-round way and conducted a large-scale agricultural insurance experiment nationwide. From the trial to 1993, it was a development process from low-speed growth to high-speed growth, and agricultural insurance developed rapidly and steadily.

The development of agricultural insurance at this stage really embodies the government's responsibility, but it is not comprehensive and has the characteristics of invisibility. The government has not set up a special policy-based agricultural insurance company, but has given certain policy encouragement and financial support to China People's Insurance Company, which lacks systematic management, which is far from enough to establish a perfect and effective agricultural insurance system. It can be said that the government's behavior at this stage is still relatively implicit. In addition, although the government has issued many policies to guide the development of agricultural insurance, it has not issued corresponding laws and regulations, which cannot effectively supervise the development of agricultural insurance, which is not conducive to the long-term stable development of agricultural insurance. Therefore, the change of policy will have a great impact on the development of agricultural insurance, which is also an important incentive for agricultural insurance to enter the shrinking and wandering stage in the next stage.

(4) The exploration and perplexity of agricultural insurance system during the establishment of market economy system: from 1993 to now

At this stage, agricultural insurance has experienced rapid development in the early stage since the reform and opening up, and entered a stage of shrinking and wandering; At the same time, with the government's attention to "agriculture, countryside and farmers", the No.1 document of the Central Committee has been agriculture-related for seven consecutive years from 24 to this year. With the promotion of relevant functional departments, China's agricultural insurance pilot has been promoted in all directions, and agricultural insurance has made great progress. Therefore, this stage can be divided into two different stages: the stage of agricultural insurance shrinking and wandering-the absence of government responsibilities (1993-23), and the stage of agricultural insurance recovery and development-the return of government responsibilities (24-present).

1. Stagnation of agricultural insurance (1993-23): Absence of government responsibilities

After the publication of Deng Xiaoping's important speech on inspecting the south in the spring of p>1992 and the convening of the 14th National Congress of the Communist Party of China, the agricultural and rural economic systems were accelerated in the direction of market economy. However, with the continuous advancement of rural economic system reform, the expected rapid development of agricultural insurance has not occurred. At that time, agricultural insurance had been involved in various fields such as agriculture, forestry, animal husbandry and fishery, and the types of insurance had been developed from only a few types of insurance such as pigs and large livestock when the pilot project was resumed in 1982 to nearly 1 types of insurance such as cotton, rice, flue-cured tobacco, chicken, rabbit, sheep, shrimp farming and scallop farming, and new types of insurance for commercial agriculture, development agriculture and promoting agriculture through science and technology have been continuously developed, such as Some types of insurance, such as wheat field fire insurance, cotton insurance and tobacco insurance, have been carried out in a large area of the country. However, from the scale point of view, from 1993 to now, it is a landslide process of agricultural insurance from high-speed growth to low-speed growth, and the development of agricultural insurance is in trouble. By the end of 1992, the national agricultural insurance premium income had reached 817 million yuan, accounting for 2.57% of the property insurance premium income in that year, but by the end of 1997, the agricultural insurance premium income only accounted for 1.18% of the property insurance premium income; Since 1998, the decline of agricultural insurance has become more serious. By 2, agricultural insurance income only accounted for .66% of property insurance income, and in 24 it further fell to .35%. Generally speaking, the proportion of agricultural insurance income to property insurance income has been declining, which is incompatible with the rapid development of the entire insurance industry.

during this period, the government adhered to the principle of commercial operation of agricultural insurance, so there was almost no policy support and financial subsidy for the business entities of agricultural insurance. That is to say, the government did not undertake its corresponding responsibilities in agricultural insurance during this period, but let the agricultural insurance develop and explore independently. The quasi-public nature of agricultural insurance products determines that commercial insurance companies cannot provide effective supply, and farmers are unwilling and unable to pay higher insurance premiums without government financial subsidies. The operators of agricultural insurance have to reduce the original agricultural insurance business, which makes the agricultural insurance market enter a vicious circle of shrinking. Therefore, the absence of government is the only reason for the shrinking of agricultural insurance from 1993 to 23.

2. The stage of agricultural insurance recovery and development (from 24 to now): the responsibility of the government returns

Under the condition of market economy, agriculture is different from other industries in that it faces the double threats of natural risks and market risks, and either risk may have a serious negative impact on agricultural development. Under the impact of economic globalization and market liberalization, the role of these risks is more obvious and complicated. Judging from the current rural economic situation in China, agriculture is still relatively backward, and all kinds of risks are affecting the development of rural economy, and the backward situation of agriculture cannot be changed quickly. Therefore, the current development of agricultural insurance in China will seriously restrict the sustainable development of agriculture, and then affect the healthy operation of the whole national economy. Fortunately, at present, the government attaches great importance to the development of agricultural insurance and is actively promoting the agricultural insurance pilot. In recent years, the China Insurance Regulatory Commission has always regarded promoting the development of agricultural insurance and providing insurance services for agriculture, rural areas and farmers as a key task, and actively studied and established an agricultural insurance system in line with China's national conditions.

the all-round promotion of the new round of agricultural insurance pilot has brought a good opportunity for the development of agricultural insurance in China, and the role played by the government is obvious to all. With the further promotion of the depth and breadth of the new round of agricultural insurance pilot, China's agricultural insurance shows the characteristics of regional development. In a few areas, agricultural insurance has developed rapidly because of the characteristics and advantages of regional agriculture, the attention of local governments, or the exploration of a suitable institutional model. The exploration of these regional agricultural insurance development models has played an important role in improving the local agricultural risk management level and accumulated valuable experience for the development of agricultural insurance in China. Generally speaking, since 24, under the impetus of the government, China's agricultural insurance has begun to enter a rapid recovery stage, and the momentum is getting longer and longer, and it has begun to take shape. China's agricultural insurance has entered the stage of government-induced development, and governments at all levels have begun to assume their due responsibilities in policy guidance, financial subsidies, legal supervision and so on. Of course, there are bound to be many insurmountable problems, but with the return of government responsibilities, the development of agricultural insurance in China has entered the stage of institutional innovation in the new era.

During the pilot recovery period from p>1982 to 1986, the government intervened effectively, and agricultural insurance was monopolized by China People's Insurance Company on behalf of the government. Profit and loss problem is not considered in the business operation, and the insurance for planting and aquaculture is subject to national unified accounting, and the profit and loss are complemented by the insurance company's internal insurance, and the loss can be made up by the profits of other insurance. In the process of operation, this method gradually reveals defects. On the one hand, the unified accounting of agricultural insurance and other commercial insurance, which is complementary to profit and loss, is not conducive to mobilizing the enthusiasm of insurance companies to operate, and is also not conducive to the government to assess the performance of insurance companies. On the other hand, the situation of agricultural insurance "big losses, small losses" makes insurance companies tend to reduce the supply of agricultural insurance and increase the operation of profitable insurance.

in June p>1987, the government decided to set up a rural insurance business department within the People's Insurance Company of China, specializing in the operation of agricultural insurance. Since 1988, agricultural insurance has been accounted separately in the province. However, due to the government's failure to straighten out the relationship with insurance companies and farmers, agricultural insurance business risks have become more concentrated, and huge losses have made it unsustainable to operate agricultural insurance.

In p>1986, the Xinjiang Production and Construction Corps established the Agriculture and Animal Husbandry Insurance Company. The agricultural insurance offered by the Insurance Company of Xinjiang Construction Corps belongs to the industrial insurance, which mainly targets the farms of Xinjiang Agricultural Reclamation System, supplementing agriculture with industry, and the state finance also gives great support. However, with the restructuring of the company, the agricultural insurance business also showed a downward trend.

in p>1991 and 1996, the central government and the State Council respectively made decisions such as "with the support of governments at all levels, establishing multi-level and interrelated rural special insurance funds and gradually establishing rural disaster compensation system" and "developing rural cooperative insurance" and "gradually establishing various agricultural insurance institutions", and "in order to avoid losses caused by agricultural insurance institutions underwriting farming insurance, the state will give appropriate policy support".

People's Insurance Company of China began to change its business mode, entrusted local governments to act as agents, and jointly organized with local and other economic organizations the pilot work of developing cooperative agricultural insurance and other business modes. The above-mentioned pilot projects have made a useful exploration on the operation of agricultural insurance in China. However, due to the lack of applicable laws, regulations and financial support, most of the business experiments have been suspended. Agricultural insurance cooperatives, in particular, can effectively solve the problems of moral hazard and adverse selection in insurance management. However, due to farmers' indifference to insurance, it is difficult to expand the scale of insurance cooperatives, and it is difficult to raise insurance funds. Moreover, insurance cooperatives have limited compensation ability and are not attractive to farmers.

China's agricultural insurance began to recover in 1982, and by the peak of 1992, the premium income of agricultural insurance reached 82 million yuan, but it was as high as 116% in payout ratio, which was completely at a loss. Since 1996, the scale of agricultural insurance has been shrinking year by year. In 21, the scale of agricultural insurance fell to the lowest point in more than 2 years. The income of agricultural insurance premium was only 3 million yuan, accounting for .14% of the total insurance premium. The density of agricultural insurance was only .38 yuan, and the depth of agricultural insurance was only .2%, which was the biggest decline in the past 2 years. There are 23 million farmers in China, and the average household premium is less than that of 2 yuan.

generally speaking, since the resumption of agricultural insurance business in China, although agricultural insurance has made achievements in a certain period of time, due to the high risk and high compensation of agricultural insurance, the effective demand is not enough to support a fully commercialized agricultural insurance market. Commercial insurance companies are reluctant to set foot in agricultural insurance because of fear of losses, and the business volume of agricultural insurance has shown a negative growth year by year, and the market has "failed". It took China 23 years to reach the same conclusion as the international agricultural insurance counterparts: agricultural insurance cannot be commercialized.

Further reading: How to buy insurance, which is better, and teach you how to avoid these "pits" of insurance.