Effects of Agricultural Insurance on Poverty Alleviation under Uncertain Price of Agricultural Products

Jian Zhang, Boyu Yang and Lina Zhao

Asian Agricultural Research, 2019, vol. 11, issue 07

Abstract: Poverty alleviation of the rural poor is the most arduous task in building a moderately prosperous society in all respects in China, and agricultural insurance is an important financial tool for this task. Due to different capital levels, individual farmer will adopt production technology with different efficiency. In the case of uncertain price of agricultural products, this paper establishes a series of multiple equilibrium models based on agricultural risk and agricultural insurance. Under the catastrophe risk, the probability of falling into the poverty trap is calculated, and the effects of agricultural insurance on poverty alleviation are discussed respectively. It is found that agricultural insurance can effectively reduce the probability of falling into the poverty trap for the farmers whose initial capital is greater than a certain critical value. While the government subsidizes the premium of agricultural insurance by a certain proportion, the effect on poverty alleviation will be further improved.

Keywords: Agribusiness (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:ags:asagre:299720

DOI: 10.22004/ag.econ.299720

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