The Impact of Credit and Insurance on Farmers’ Climate-Smart Agricultural Technologies Adoption: Evidence from Climatic Transition Zone in China

Promoting the adoption of climate-smart agricultural technologies (CSATs) is essential for food security and achieving the Sustainable Development Goals (SDGs). However, adoption rates remain low. The objective of this study is to reveal the associations between financial instruments and farmers’ adoption of CSATs. Using survey data from 1219 farmers in climatic transition zone of China, the Probit model, and mediation model were used to empirically test the associations of credit and insurance on farmers’ adoption of CSATs. The results show that both credit and insurance are positively associated with CSATs adoption, with insurance exhibiting a stronger marginal effect than credit. Mediation analysis reveals that credit and insurance are positively associated with farmers’ adoption behavior through attending technical training, strengthening subjective norms, and improving risk attitudes. Heterogeneity analysis indicates that these associations vary significantly across different climatic sub-regions. The findings provide evidence-based policy insights for leveraging targeted financial instruments to accelerate CSATs adoption among smallholders in China and other countries.