Agricultural Insurance and Agricultural Fertilizer Non-Point Source Pollution: Evidence from China’s Policy-Based Agricultural Insurance Pilot

Ziheng Niu, Feng Yi and Chen Chen
Additional contact information
Ziheng Niu: Innovative Development Institute, Anhui University, Hefei 230039, China
Feng Yi: School of Economics, Anhui University, Hefei 230601, China
Chen Chen: School of Economics and Management, Beijing Forestry University, Beijing 100083, China

Sustainability, 2022, vol. 14, issue 5, 1-16

Abstract: For a long time, the relationship between agricultural insurance and the input of chemical fertilizer has been controversial. Since the pilot of policy-based agricultural insurance in China, most scholars have only paid attention to the role of the policy in ensuring farmers’ income and reducing farmers’ poverty, but its possible negative impact on the agricultural ecological environment is often ignored. If the pilot of this policy motivates farmers to apply more chemical fertilizers, which in turn causes more serious environmental problems, this would be contrary to the goals of the policy itself. Using the panel data of 31 provinces from 2000 to 2020 in China, this paper regards the pilot of policy-based agricultural insurance as a quasi-natural experiment and uses a difference-in-difference model to evaluate the impact of policy-based agricultural insurance on agricultural fertilizer non-point source pollution. The research results show that the pilot of policy-based agricultural insurance has aggravated the non-point source pollution of agricultural fertilizers in China. After a series of robustness tests, the research conclusion is still valid. At the same time, the effect of policy-based agricultural insurance aggravating agricultural fertilizer non-point source pollution had a lasting impact for 4 years during the pilot period and did not disappear until the policy-based agricultural insurance was fully covered. In addition, the heterogeneity results show that farmers in eastern China and high-disaster areas have a higher probability of moral hazard with overuse after purchasing policy-based agricultural insurance.

Keywords: policy-based agricultural insurance; agricultural fertilizer non-point source pollution; moral hazard; difference-in-difference model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.mdpi.com/2071-1050/14/5/2800/pdf (application/pdf)
https://www.mdpi.com/2071-1050/14/5/2800/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:14:y:2022:i:5:p:2800-:d:760401

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().