Study Results from Beijing Normal University Provide New Insights into Crop Insurance (Area Yield Index Insurance or Farm Yield Crop Insurance? Chinese Perspectives On Farmers’ Welfare and Government Subsidy Effectiveness)

2020 JAN 30 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Researchers detail new data in Agriculture - Crop Insurance. According to news reporting originating in Beijing, People’s Republic of China, by NewsRx journalists, research stated, “We evaluate the performance of area yield crop insurance (AYCI) and farm yield crop insurance (FYCI) using farm-level yield data from China, focusing on their effects on farmers’ welfare, and their cost-effectiveness in terms of government subsidy. Given a subsidy rate sufficient to generate a politically acceptable participation level, the price advantage of AYCI may no longer offset its higher basis risk, and consequently FYCI may be preferred by farmers.”

Financial support for this research came from National Social Science Foundation of China.

The news reporters obtained a quote from the research from Beijing Normal University, “From the government’s perspective, AYCI is the cheapest option to maintain reasonable farmer participation in insurance, but is not necessarily the most cost-effective choice. Our findings suggest that, contrary to an assumption that informs many developing country agricultural insurance programmes, AYCI schemes are not necessarily preferred to FYCI.”

According to the news reporters, the research concluded: “Decisions on the structure of a national agricultural insurance programme should be based on careful consideration of local conditions.”

For more information on this research see: Area Yield Index Insurance or Farm Yield Crop Insurance? Chinese Perspectives On Farmers’ Welfare and Government Subsidy Effectiveness. Journal of Agricultural Economics, 2020;71(1):144-164. Journal of Agricultural Economics can be contacted at: Wiley, 111 River St, Hoboken 07030-5774, NJ, USA. (Wiley-Blackwell - http://www.wiley.com/; Journal of Agricultural Economics - http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1477-9552)

Our news correspondents report that additional information may be obtained by contacting T. Ye, Beijing Normal University, Acad Disaster Reduct & Emergency Management, Beijing, People’s Republic of China. Additional authors for this research include J.W. Wang, Y. Gao, W.Y. Hu and B.J. Barnett.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1111/1477-9552.12326. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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