Can agricultural insurance encourage farmers to apply biological pesticides? Evidence from rural China

Lin Tang and Xiaofeng Luo

Food Policy, 2021, vol. 105, issue C

Abstract: Based on the survey data from farmers in Hubei, Jiangxi, and Zhejiang provinces, this paper constructs a theoretical model of the impact of agricultural insurance on farmers’ biopesticide application behavior. Furthermore, it adopts the endogenous switching probit model to empirically analyze the effect of agricultural insurance on farmers’ biopesticide application behavior. We also estimate the probability that farmers will buy agricultural insurance and apply biological pesticides under the counterfactual framework. The results show that, first, 59.12% of the farmers in the sample area have purchased agricultural insurance and that 62.45% of the farmers have used biological pesticides. Second, the overall average treatment effect is 0.082. This indicates that, if all farmers buy agricultural insurance, the probability that farmers will apply biological pesticides increases by 8.2%. It can be seen that purchasing agricultural insurance encourages farmers to apply biological pesticides. Third, purchasing agricultural insurance can encourage farmers to increase the use of biological pesticides and reduce the use of chemical pesticides. In addition, purchasing agricultural insurance increases the ratio of the amount of biological pesticides to chemical pesticides. This finding shows that agricultural insurance can increase the relative importance of biological pesticides.

Keywords: Agricultural insurance; Biological pesticides; Chemical pesticides; Farmers’ behaviour; Rural China (search for similar items in EconPapers)
JEL-codes: Q12 Q18 Q57 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfpoli:v:105:y:2021:i:c:s0306919221001536

DOI: 10.1016/j.foodpol.2021.102174

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