Effects of Agricultural Insurance on Water Pollution in China

Abstract

Water pollution is the most serious environmental problems in China now, water pollution directly affects people's quality of life and the sustainable development of agriculture, and the biggest source of water pollution is agricultural non-point source pollution, so we need to pay more attention to the environmental impact of agricultural production and reduce agricultural non-point source pollution. This paper examines the environmental impact of agricultural insurance on water pollution. Using annual data from 30 provinces across China between 2011 and 2019, this paper employs a two-way fixed-effects model to examine the correlation between agricultural insurance development and agricultural pollutant emissions. Additionally, it takes agricultural carbon emissions and agricultural output value as dependent variables to comprehensively investigate the environmental and economic impacts of agricultural insurance. The research results indicate that the development of agricultural insurance has a significant effect on reducing agricultural water pollution and carbon emissions. The pollutant reduction effect is more significant in the major grain-producing areas. The positive environmental effect of agricultural insurance is based on the fact that the development of agricultural insurance is conducive to reducing the use of pesticides and chemical fertilisers and does not come at the expense of increased agricultural output.