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

Ziheng Niu,Feng Yi,Chen Chen

doi:10.3390/su14052800

Ziheng Niu, Feng Yi + Show 1 more

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https://doi.org/10.3390/su14052800

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Journal: Sustainability	Publication Date: Feb 28, 2022
Citations: 10	License type: CC BY 4.0

Affiliation: Beijing Forestry University, Anhui University

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.

Highlights

For a long time, the passive situation of farmers “relying on the weather for food” inChina’s agricultural production has not been fundamentally changed, and the ability of farmers to withstand natural disasters and other agricultural risks is still not strong [1]
We need to note that almost all studies on this topic use only a small data sample to verify the effect of agricultural insurance on fertilizer inputs [8–14,35], and the research conclusions obtained will not have such a strong warning effect, because it is difficult for us to determine the macro performance of agricultural insurance on fertilizer input in a specific country context
Using the panel data of 31 provinces in China from 2000 to 2020, this paper regarded the pilot extension of policy-based agricultural insurance as a quasi-natural experiment and used the DID model to evaluate the environmental effect of policy-based agriculture insurance

Summary

Introduction

China’s agricultural production has not been fundamentally changed, and the ability of farmers to withstand natural disasters and other agricultural risks is still not strong [1]. In order to ensure the agricultural production safety of Chinese farmers and further enhance the ability of farmers to resist agricultural risks, in 2007, the Chinese government began to vigorously carry out the pilot work of policy-based agricultural insurance, and in. China’s policy-based agricultural insurance is promoted by the government and has a non-profit nature, with subsidies jointly provided by central and local finance. By 2015, the insured amount and signed premium of policy-based agricultural insurance in China accounted for more than. After more than 10 years of development, policy-based agricultural insurance has gradually become the main way of purchasing insurance for farmers in China

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