Hu Shuli/Shanghai Daily news

The vicious H5N1 avian flu virus has struck more than 15 countries and regions since September and it continues to spread.
In China alone, 11 counties across the country have reported H5N1 outbreaks in the past month and all the signs indicate that more are highly likely.
As the government and the public focus their attention on how and when the epidemic can be brought under control, we feel now is the time to raise a more deep-seated concern: Compensation.
In a modern society, any rural economy is vulnerable to both the forces of nature and the market. The avian flu epidemic is a double hazard.
On the one hand, it poses a potential natural disaster to poultry farmers.
On the other hand, there is long-term uncertainty in the market as to how much time and resources it will take to tame the virus.
It is not adequate for the government simply to cull all the poultry in the infected areas and then compensate those farmers afterwards.
Compared with emergency response mechanisms aimed at dealing with public health crises within a limited area, a constant hedging mechanism against natural and market risks will better protect farmers.
Under the current circumstances, it is safe to say that the prices of poultry and eggs will continue to fall.
One way or another, poultry farmers across the country will be affected.
They made their investment decisions, we must remember, long before the avian flu outbreaks.
In the first three quarters of this year, the prices of poultry and eggs rose, respectively 7.7 percent and 9 percent year-on-year - leading all other categories of agricultural produce.
Protecting farmers
But avian flu will likely cause devastatingly sharp market fluctuations. The living costs of urban residents will also go up.
This is just one example of how the economic costs of avian flu will be shouldered by all members of society.
So to begin with, it is imperative that the government hedge some of the risks with policies that stabilize market expectations and investment choices by farmers.
But how?
In recent years, cuts in rural taxes and fees have lessened farmers' burdens somewhat. But given the low yields of the agricultural industry and thus the weak base of the rural economy, no simple market-based risk hedging mechanism can adequately protect farmers.
Sadly, this has been evinced by the failure of China's agricultural insurance system, which has not worked to protect farmers since it was introduced in 1982.
Recently, the country decided to increase the budget for developing the agriculture industry and rural areas.
Indeed, lessons from mature market economies show that government backing is indispensable to offering effective agricultural insurance.
The crucial puzzle for the government to solve on this front is how the government and the market can pool resources to provide insurance for farmers.
In addition, rather than focusing only on land, irrigation, electrical power and gas, the government should invest more in other infrastructure projects that can serve as an economic buffer in case of market and natural disasters.

(The author is editor of Caijing Magazine, a leading national business publication. The views expressed are her own.)