Insurance Plus Futures: Agricultural Commodity Price Reform in China

China's agricultural support policies are moving towards market institutions through a quasi-market transition. Ten years of direct minimum purchase price procurement on agricultural commodities resulted in overcapacity, oversupply, mixed-market signals and grey-market imports. The Insurance Plus Futures (保险 + 期货) policy pilot in agricultural price reform is a leading indicator of reform in China's agricultural production and rural finance architecture. State procurement of staple crops is now ending, and an interim governance structure is in place for the transition to market prices. This article assesses the historical institutional development of three key economic institutions in Chinese agricultural production: agricultural prices, insurance and futures. It examines government plans to move from a centrally procured to a provincially variable agricultural production model, examines the provincial sectoral target-price mechanisms constructed in 2016–2018 as interim price-setting mechanisms, looks at the emergence of government mandated agricultural insurance as a measure to cover the subsidy previously served by the minimum purchase price system and assesses the prospects for institutional development of futures contracts, commodities exchanges and price formation institutions in China.