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Efficiency of Agricultural Insurance in Facilitating Modern Agriculture Development: From the Perspective of Production Factor Allocation

Author

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  • Li-Sha Fu

    (Institute of Agricultural Information, Chinese Academy of Agricultural Sciences, Beijing 100081, China)

  • Tao Qin

    (School of Economics and Management, Beijing Forestry University, Beijing 100083, China)

  • Gan-Qiong Li

    (Institute of Agricultural Information, Chinese Academy of Agricultural Sciences, Beijing 100081, China)

  • San-Gui Wang

    (College of Agriculture and Rural Development, Renmin University of China, Beijing 100872, China)

Abstract

Agricultural insurance is instrumental in consolidating the gains of poverty alleviation and advancing rural revitalization. It significantly aids in the efficient allocation of agricultural production factors, which in turn enhances agricultural output and bolsters the evolution of modern agriculture. Therefore, utilizing data from 583 household surveys and employing endogenous transformation and intermediary effect models, this paper analyzes the production factor allocation effect and specific mechanism of agricultural insurance. It focuses on small-scale farmers and new agricultural operators, exploring how insurance contributes to the advancement of modern agricultural practices. The results show the following: (1) Agriculture insurance can significantly affect the agricultural scale input behavior of farmers such as land input scale and input scale, agricultural machinery application behavior such as the degree of mechanization and water conservancy application, agricultural technology adoption behavior, and planting structure selection behavior, thereby helping to modernize agriculture. (2) There is heterogeneity in the impact of agriculture insurance on the allocation of production factors for small farmers and new agricultural operators. For small farmers, agriculture insurance has a significant promoting effect on their agricultural machinery application behavior, agricultural technology adoption behavior, and planting structure selection behavior. For new agricultural operators, agriculture insurance significantly promotes their agricultural scale input behavior, agricultural machinery application behavior, and agricultural technology adoption behavior. (3) In terms of the mechanism of action, agriculture insurance mainly promotes agricultural scale input behavior through land transfer, facilitates agricultural machinery application behavior by purchasing agricultural machinery equipment and services, encourages agricultural technology adoption behavior by strengthening agricultural technology training, and enhances professional production levels by increasing the scale of insured planting, thereby contributing to the development of modern agriculture. Based on this, several policy suggestions have been proposed. These include enhancing the directionality of agriculture insurance policies, improving the collaborative interaction mechanism between agriculture insurance and agricultural credit financing, and adopting certain reward and punishment measures to curb moral hazard.

Suggested Citation

  • Li-Sha Fu & Tao Qin & Gan-Qiong Li & San-Gui Wang, 2024. "Efficiency of Agricultural Insurance in Facilitating Modern Agriculture Development: From the Perspective of Production Factor Allocation," Sustainability, MDPI, vol. 16(14), pages 1-21, July.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:14:p:6223-:d:1439471
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    References listed on IDEAS

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    1. Jisang Yu & Aaron Smith & Daniel A Sumner, 2018. "Effects of Crop Insurance Premium Subsidies on Crop Acreage," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(1), pages 91-114.
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