Promoting the adoption of environmentally friendly agricultural practices: The role of crop insurance participation

Abstract This study investigates the impact of crop insurance participation on farmers' adoption of environmentally friendly agricultural practices using microsurvey data from the China Land Economic Survey 2020. Propensity score matching and an endogenous switching probit model are applied to address potential selection bias. We find that crop insurance participation has significant and positive effects on farmers' adoption of straw return and biological pesticides. Specifically, it increases the probability of adopting straw return and biological pesticides by 45.6% and 46.3%, respectively. These impacts are particularly large for younger, larger scale and more risk‐averse farmers. Our results highlight the necessity of supporting crop insurance participation to encourage desirable environmental outcomes. We also discuss potential policies to facilitate crop insurance uptake in rural China.

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Publication Details

Journal
Australian Journal of Agricultural and Resource Economics
Published
2024-12-10
DOI
https://doi.org/10.1111/1467-8489.12603
Primary Topic
Agricultural risk and resilience
Type
article
Field-Weighted Citation Impact
0.00

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article

Promoting the adoption of environmentally friendly agricultural practices: The role of crop insurance participation

Ziming Liu, Min Su, Shuyi Feng
Australian Journal of Agricultural and Resource Economics
Agricultural risk and resilience
article

Promoting the adoption of environmentally friendly agricultural practices: The role of crop insurance participation

Ziming Liu, Min Su, Shuyi Feng
article en

Abstract

Abstract This study investigates the impact of crop insurance participation on farmers' adoption of environmentally friendly agricultural practices using microsurvey data from the China Land Economic Survey 2020. Propensity score matching and an endogenous switching probit model are applied to address potential selection bias. We find that crop insurance participation has significant and positive effects on farmers' adoption of straw return and biological pesticides. Specifically, it increases the probability of adopting straw return and biological pesticides by 45.6% and 46.3%, respectively. These impacts are particularly large for younger, larger scale and more risk‐averse farmers. Our results highlight the necessity of supporting crop insurance participation to encourage desirable environmental outcomes. We also discuss potential policies to facilitate crop insurance uptake in rural China.

Australian Journal of Agricultural and Resource EconomicsVol. 69(1)
Nanjing Agricultural University (CN), China Resources (China) (CN), Zhejiang University (CN)
National Natural Science Foundation of China, Ministry of Science and Technology of the People's Republic of China, State Administration of Foreign Experts Affairs, China Scholarship Council, National Social Science Fund of China
Zero hunger
Openalex Percentile: Top 70%
Agricultural risk and resilience
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