The Impact of Agricultural Insurance on Planting Structure Adjustment—An Empirical Study from Inner Mongolia Autonomous Region, China

Abstract

Agricultural insurance is a risk management tool developed to guarantee regional production and national food security. Based on survey data from 629 households in the Inner Mongolia autonomous region, China, this paper examines the impact of agricultural insurance on farmers’ planting structure. The results show that: (1) Farmers’ participation in agricultural insurance significantly affects their planting structure, especially lowering the level of specialization in production; insured households are about 3–6% lower than the non-insured, and there is a complementary effect between insurance participation and diversified planting. (2) For different types of farmers, participating in insurance has different effects on their agricultural production structure. Farmers purchasing insurance with low or medium levels in proportion to agricultural income significantly reduce the degree of production specialization. The effect of participation in insurance on large-scale farmers’ adjustment of planting structure is more obvious. For pure grain farmers, participation in insurance will reduce planting specialization by about 3–4%. (3) Participation in agricultural insurance will encourage farmers to plant grain crops, but the effect is small. Therefore, we need to expand the coverage areas, increase insurance types, and improve coverage levels; the products should be more targeted and differentiated, strengthening farmers’ participation in complete cost insurance and income insurance.