Research on Dynamic Relationship between Agricultural Insurance and Agricultural Disaster Degree

Agricultural insurance is an important system of rural financial support for agricultural development. Based on the analysis of agricultural insurance improving farmers’ anti-risk ability and reducing the damage, the dynamic relationship is discussed with the adoption of error correction model and the data of Guangdong province between 1997 and 2010. The result shows that the promotion of agricultural insurance depth is beneficial to reducing agricultural damage degree and there exists long-term equilibrium relationship. More precisely, agricultural insurance depth is the Granger reason of agricultural damage degree while the reverse relationship has not been supported yet. Based on the empirical analysis, this paper discusses the characteristics and foundation of agricultural production as well as market characteristics of agricultural insurance to further explore the necessity of financial support