Loss Aversion Effect: Current Situation and Future Prospect of Agricultural Insurance in China

Abstract

The subsidy for farmer and peasant is well-developed in a few agricultural countries, since those countries' GDP mostly rely on crops or vegetables and it is understandable why those counties have a such comprehensive agricultural insurance system. China does not rely on farming to raise GDP so facilities and subsidy for farmers are not that advanced. However, China is going toward a good tendency, and the coverage and completeness is increasing drastically. So even China was not completable with those countries in the world, it would likely to find a way to establish comprehensive agricultural insurance. This essay analyzes several drawbacks of the insurance in China and provide some solutions for it. By separating the popularization of education and the introduction of talents, China will solve the problem of insurance in poor areas in a short time. At the same time, national policies can also be modified accordingly. For different kinds of crops, diverse guarantee amounts and compensation amounts can be formulated, together with the national subsidy mechanism.