IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v16y2024i14p6223-d1439471.html
   My bibliography  Save this article

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/16/14/6223/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/16/14/6223/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fracarolli Nunes, Mauro & Lee Park, Camila & Shin, Hyunju, 2021. "Corporate social and environmental irresponsibilities in supply chains, contamination, and damage of intangible resources: A behavioural approach," International Journal of Production Economics, Elsevier, vol. 241(C).
    2. Quentin Stoeffler & Michael Carter & Catherine Guirkinger & Wouter Gelade, 2022. "The Spillover Impact of Index Insurance on Agricultural Investment by Cotton Farmers in Burkina Faso," The World Bank Economic Review, World Bank, vol. 36(1), pages 114-140.
    3. Rocha, Jr., Adauto B. & Fulginiti, Lilyan E. & Perrin, Richard K. & Walters, Cory G., 2022. "What is the value of crop insurance for Nebraskan farmers?," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322529, Agricultural and Applied Economics Association.
    4. Alia DeLong & Marilyn E. Swisher & Carlene A. Chase & Tracy Irani & Jorge Ruiz-Menjivar, 2023. "The Roots of First-Generation Farmers: The Role of Inspiration in Starting an Organic Farm," Land, MDPI, vol. 12(6), pages 1-20, June.
    5. Alexandre Gohin, 2019. "General Equilibrium Modelling of the Insurance Industry: U.S. Crop Insurance," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 4(2), pages 108-145, December.
    6. Azzam, Azzeddine & Walters, Cory & Kaus, Taylor, 2021. "Does subsidized crop insurance affect farm industry structure? Lessons from the U.S," Journal of Policy Modeling, Elsevier, vol. 43(6), pages 1167-1180.
    7. Erich Seamon & Paul E. Gessler & John T. Abatzoglou & Philip W. Mote & Stephen S. Lee, 2023. "Climatic Damage Cause Variations of Agricultural Insurance Loss for the Pacific Northwest Region of the United States," Agriculture, MDPI, vol. 13(12), pages 1-13, November.
    8. Pengfei Liu & Lingling Hou & Dongqing Li & Shi Min & Yueying Mu, 2021. "Determinants of Livestock Insurance Demand: Experimental Evidence from Chinese Herders," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(2), pages 430-451, June.
    9. Aristide Maniriho & Edouard Musabanganji & Philippe Lebailly, 2022. "A Comparative Study between Major Crop (Potato) and Minor Crop (Onion) in Volcanic Highlands of Rwanda," Journal of Agriculture and Crops, Academic Research Publishing Group, vol. 8(2), pages 68-74, 04-2022.
    10. Feng, Shuaizhang & Han, Yujie & Qiu, Huanguang, 2021. "Does crop insurance reduce pesticide usage? Evidence from China," China Economic Review, Elsevier, vol. 69(C).
    11. Tsiboe, Francis & Turner, Dylan, 2023. "The crop insurance demand response to premium subsidies: Evidence from U.S. Agriculture," Food Policy, Elsevier, vol. 119(C).
    12. Baoling Zou & Zanjie Ren & Ashok K. Mishra & Stefan Hirsch, 2022. "The role of agricultural insurance in boosting agricultural output: An aggregate analysis from Chinese provinces," Agribusiness, John Wiley & Sons, Ltd., vol. 38(4), pages 923-945, October.
    13. Samiul Haque & Kenneth A. Foster & Roman Keeney & Kathryn A. Boys & Badri G. Narayanan, 2019. "Output and input bias effects of U.S. direct payments," Agricultural Economics, International Association of Agricultural Economists, vol. 50(2), pages 229-236, March.
    14. Jianru Fu & Ruiyuan Shen & Chao Huang, 2023. "How does price insurance alleviate the fluctuation of agricultural product market? A dynamic analysis based on cobweb model," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 69(5), pages 202-211.
    15. Ming Zhu & Ruihua Yang, 2023. "The Impact of Agricultural Insurance on Farmers’ Enthusiasm for Sugarcane Production: Evidence from Guangxi, China," Sustainability, MDPI, vol. 15(5), pages 1-18, February.
    16. Cui, Xiaomeng, 2020. "Climate change and adaptation in agriculture: Evidence from US cropping patterns," Journal of Environmental Economics and Management, Elsevier, vol. 101(C).
    17. Chengyu Si & Yanru Li & Wei Jiang, 2023. "Effect of Insurance Subsidies on Agricultural Land-Use," IJERPH, MDPI, vol. 20(2), pages 1-12, January.
    18. Liu, Ziheng & Lu, Qinan, 2023. "Ozone stress and crop harvesting failure: Evidence from US food production," Food Policy, Elsevier, vol. 121(C).
    19. Ahmed, Musa Hasen & Tesfaye, Wondimagegn Mesfin & Gassmann, Franziska, 2022. "Within Growing Season Weather Variability and Land Allocation Decisions: Evidence from Maize Farmers in Ethiopia," 96th Annual Conference, April 4-6, 2022, K U Leuven, Belgium 321171, Agricultural Economics Society - AES.
    20. Mauro Vigani & Jonas Kathage, 2019. "To Risk or Not to Risk? Risk Management and Farm Productivity," American Journal of Agricultural Economics, John Wiley & Sons, vol. 101(5), pages 1432-1454, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:16:y:2024:i:14:p:6223-:d:1439471. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.