Agricultural Risk Modeling Challenges in China:Probabilistic Modeling of Rice Losses in Hunan Province

This article summarizes a joint research projec undertaken under the Risk Management Solutions, Inc(RMS) banner to investigate some of the possible approaches for agricultural risk modeling in China. Two modeling approaches were investigated—the simulated weather crop index and the burn yield analysis approach. The study was limited to Hunan Province and a single crop—rice. Both modeling approaches were dealt with probabilistically and were able to produce probabilistic risk metrics. Illustrative model outputs are also presented. The article discusses the robustness of the modeling approaches and their dependence on the availability, access to, and quality of weather and yield data. We offer our perspective on the requirements for models and platforms for agricultural risk quantification in China in order to respond to the needs of all stakeholders in agricultural risk transfer.

Prevention of Agricultural Market Risks by Agricultural Production Entities in Hubei Province

Different agricultural production and operation entities face the same market risks.Since there is a huge gap in market risk prevention ability between agricultural market operation entities,the gap of risk prevention effect is huge.Using statistical analysis and comparative analysis methods,this paper analyzed characteristics and influencing factors of agricultural market risks and pointed out characteristics of agricultural market and special characteristics of agricultural production and operation entities in Hubei Province.Based on SWOT analysis on market risk prevention ability of agricultural production and operation entities in Hubei Province,it came up with three recommendations,including upgrading agricultural production and operation entities,enlarging the production and operation scale,and strengthening the ability of balancing the market demand and supply and bargaining power and pricing power.

Risk Management Strategy for Agricultural Operation Subjects in Simple Scale Expansion Mode

Agricultural operation subject is a main body of the market economy. At present,the simple scale expansion mode is a major mode of agricultural operation in China. According to some hypothesis,scale expansion will inevitably bring high income,but such hypothesis has serious defects. The operation mechanism of the simple scale expansion mode includes farmer operation mechanism,professional farmer operation mechanism,and " company + farmers" operation mechanism. In the production and operation,they will be faced with different natural risks,technical risks,market risks and policy risks. Besides,their risk control ability is also varied. Therefore,it is required to take different agricultural risk management strategies. The " company + farmers" production and operation subjects have the highest ability of risk management. Other subjects should learn their experience.

Farmers' Perception and Awareness and Factors Affecting Awareness of Farmers Regarding Crop Insurance as a Risk Coping Mechanism Evidence from Pakistan

This study has been conducted in three districts of Punjab Province namely, Dera Ghazi Khan, Rajan Pur and Bahawalpur of Pakistan. The study showed the results of a survey of 300 farmers which was organized to assess awareness level of farmers regarding crop insurance, factors affecting the awareness level among farmers and the perception of farmers about crop insurance. Based on exploratory research work upon the responses of farmers, the average and standard deviation were calculated. Probit model was applied to explore the factors affecting the awareness level of farmers. SPSS was used for the analysis of the collected data. The results revealed that out of 300 farmers, 184 farmers were aware with crop insurance and rests of the 116 farmers were not aware. Banks and E-media were found to be the two most important sources of the awareness for the respondent farmers. In the study area, the climatic risks were reported as the most severe risks faced by the farmers. The results also revealed the existence of negative perceptions of the farmers about crop insurance i.e. farmers perceived crop insurance as a kind of tax and they believed premium was so high that it was out of range of poor farmers and only large scale farmers could afford it. Results obtained by applying Probit model revealed that "education" and "previously availed agricultural credit" were the two most important factors which affected the awareness of the farmers regarding crop insurance.

Establishment and Application of Assessment Indicator System of Agricultural Catastrophe Vulnerability

To give play to the role of agricultural catastrophe risk fund in spreading agricultural catastrophe risk,we select natural conditions,economic conditions,social conditions,as the external vulnerability assessment indicators;select commodity rate of agricultural products,substitutability of agricultural products,the extent of agricultural products being related to the national economy and the people's livelihood,as the internal vulnerability assessment indicators.We assign weight to indicators using Analytic Hierarchy Process,and establish assessment indicator system of agricultural catastrophe vulnerability,to analyze the compensation for losses of different agricultural products arising from agricultural catastrophe in different regions.And we take the case of rice in Sichuan Province,to demonstrate the role this indicator system.

The short-and long-term impacts of the COVID-19 pandemic on family farms in China-Evidence from a survey of 2324 farms

Family farms are considered the most desirable form of Chinese agriculture.Studies on the risk management of family farms are rare,while the COVID-19 pandemic provides an opportunity to explore how family farms respond to risks.Based on an online survey of 2324 family crop farms,we examine for the first time the short-term impact(immediate impact or short-term fluctuation,and farms’instantaneous response)and long-term impact(on farms’future or long-term production)of the COVID-19 pandemic on family farms’production and operation in rural China.By using factor analysis and dummy variable regression,we find that the severity of the pandemic,the lockdown of the village,and farmers’knowledge of the pandemic contribute significantly to the short-term impact,but not on the long-term impact.Farmers’characteristics such as gender,age,and education are not related to the short-term impact,but family farms with male owners or owners with high school education or below are more likely to be diversified and large-scale.The number of years the farm has existed for and agricultural insurance affect both short-term and long-term impacts.We suggest that the government needs to pay more attention to stability-enhancing policies,the market environment,vocational training and the agricultural insurance market.

Crop Insurance Premium Ratemaking Based on Survey Data:A Case Study from Dingxing County, China

Premium ratemaking is an important issue to guarantee insurance balance of payments. Most ratemaking methods require large samples of long-term loss data or farm-level yield data, which are often unavailable in developing countries. This study develops a crop insurance ratemaking method with survey data. The method involves a questionnaire survey on characteristic yield information(average yield, high yield, and low yield) of farming households’ cropland. After compensating for random error, the probability distributions of farm-level yields are simulated with characteristic yields based on the linear additive model. The premium rate is calculated based on Monte Carlo yield simulation results. This method was applied to Dingxing County, North China to arrive at the insurance loss cost ratio and calculate the necessary premium rate. The method proposed in this study could serve as a feasible technique for crop insurance ratemaking inregions that lack sufficient long-term yield data, especially in developing countries with smallholder agriculture.