Farmland Backed Annuities: A New Shelter for Aged Farmers

Abstract

Aging population and the resulting old age income shortage has come to the fore in many countries around the globe. In response, farmland-backed annuities (FBA) that liquidize farmland assets to provide living income to aged farmers have been proposed and instituted by Korean government. We aim to construct a suitable pricing model for FBA and find optimum structure for the product. Suggestions on designing FBA to meet various needs of aged-farmers follow. We also provide risk-profit profile for annuitants, annuity issuers, and reinsurers, respectively.