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The Impact of Crop Insurance on Fertilizer Use: Evidence from Grain Producers in China

Author

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  • Chongshang Zhang

    (Institute of Agricultural Economics and Development, Chinese Academy of Agricultural Sciences, Beijing 100081, China)

  • Kaiyu Lyu

    (Institute of Agricultural Economics and Development, Chinese Academy of Agricultural Sciences, Beijing 100081, China)

  • Chi Zhang

    (School of Public Administration, Zhejiang University of Finance and Economics, Hangzhou 310012, China)

Abstract

This study aims to examine the influence of crop insurance on the utilization of chemical fertilizers using plot-level data. The dataset utilized in this analysis consists of information obtained from 1039 participants residing in four major grain-producing provinces (Heilongjiang, Zhejiang, Henan, and Sichuan) in China. To address the potential issue of endogeneity, instrumental variables were employed to establish a causal relationship within the empirical model. The findings of this study indicate that crop insurance does not exert a statistically significant impact on overall fertilizer input in China. Nonetheless, the effect varies across different categories of farmers. Specifically, large-scale farmers experience a moderate reduction in fertilizer input as a result of crop insurance, while small-scale farmers do not demonstrate a significant effect. It is essential to strike a balance between risk protection and the potential influence of moral hazard in order to enhance future crop insurance policies.

Suggested Citation

  • Chongshang Zhang & Kaiyu Lyu & Chi Zhang, 2024. "The Impact of Crop Insurance on Fertilizer Use: Evidence from Grain Producers in China," Agriculture, MDPI, vol. 14(3), pages 1-13, March.
    • Handle: RePEc:gam:jagris:v:14:y:2024:i:3:p:420-:d:1351593
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    References listed on IDEAS

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