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

Author

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  • ZHANG, Jian
  • YANG, Boyu
  • ZHAO, Lina

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.

Suggested Citation

  • ZHANG, Jian & YANG, Boyu & ZHAO, Lina, 2019. "Effects of Agricultural Insurance on Poverty Alleviation under Uncertain Price of Agricultural Products," Asian Agricultural Research, USA-China Science and Culture Media Corporation, vol. 11(07), July.
    • Handle: RePEc:ags:asagre:299720
    DOI: 10.22004/ag.econ.299720
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    Keywords

    Agribusiness;

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