Market Failure and Supply Model of Chinese Agricultural Insurance

As the foundation of the national economy, agriculture is a weak industry with high risks. Agricultural risks have extensive transmission and complexity due to features of the primary industry. This paper points out that risky feature and market character of agricultural insurance lead to its dilemma. Meanwhile, it puts forward mutual agricultural insurance supply model can solve the above problems. It concludes that in comparison with commercial insurance and policy-oriented insurance, mutual insurance has unique advantages in term of information allocation and cost control which can reduce negative influence of market failure. Thus, it becomes a wise choice for insurance supply model.