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Can price risk be insured? Analyzing on the feasibility of agricultural price

index insurance program
1

WANG ke, 1ZHANG Qiao, 2XIAO Yugu, 1WANG Biwang, 1Zhso Sijian, 1Zhao Junye

(1 Agricultural Information Institute of CAAS & Key Laboratory of Agri-information Service

Technology, Ministry of Agriculture, Beijing, 100081; 2 School of Statistics, Renmin University of

China, Beijing, 100872)
Abstract: Agricultural price index insurance has been considered as an innovative insurance,
and has drawn lots of attentions in China. But there are limited studies on the feasibility of this
program in China. In the view of crop insurance innovation, this paper firstly analyzes the
insurability of price risk, then the feasibility of five ways to transfer agri. price index insurance
has been investigated, and finally we introduces the experiences of managing agri. price risk by
agricultural insurance in United State and other countries. It is concluded that: a) it is necessary
to pay more attention to the catastrophic risk of agri. price index insurance if this program will
be carried out, b) it is not feasible to adopt price index insurance for grain crops which was
homogeneity across regions, and c) income insurance or revenue insurance is the better tool
than price index insurance to manage price risk for most agricultural commodities.
Keywords: price risk, agricultural commodity, agricultural insurance, innovation, feasibility

010-8210-6259E-mail: wangke01@caas.cn

010-82109883E-mail: zhangqiao@caas.cn

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