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

Li-Sha Fu, Tao Qin, Gan-Qiong Li () and San-Gui Wang
Additional contact information
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

Sustainability, 2024, vol. 16, issue 14, 1-21

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.

Keywords: agriculture insurance; allocation of production factors; modern agricultural development; heterogeneous operating entities; mechanism of action (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.mdpi.com/2071-1050/16/14/6223/pdf (application/pdf)
https://www.mdpi.com/2071-1050/16/14/6223/ (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:16:y:2024:i:14:p:6223-:d:1439471

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 ().