Abstract
The negative effects of climate change have begun to exceed expectations and are likely to intensify. This paper studies the effects of the agricultural risk and the insurance on agricultural economy in the context of climate change. First, this paper establishes the model incorporating with the agricultural risk and insurance. The model indicates that the agricultural insurance can effectively reduce the negative impact of risks on agricultural production when the moral hazard has little influence. Next, this paper verifies the hypothesis through the panel data model and the difference-in-difference analysis. The impact of moral hazard in agricultural insurance is very modest. Agricultural insurance can effectively control agricultural risks, especially for the agriculture in the primary industry.
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