Research On The Impact Of Agricultural Insurance On Family Farms’ Production Behaviors And Its Income Effect

As the basic force for the large-scale development of China’s agriculture,family farms play an irreplaceable role in promoting agricultural specialized production,improving agricultural comprehensive benefits and promoting agricultural modernization.They are the best carriers for the development of agricultural modernization.However,the large-scale,intensive and specialized production and operation characteristics of family farms make them face more agricultural risks than ordinary farmers,which seriously hinders the realization of agricultural modernization.Agricultural insurance is an important agricultural risk management tool in China,which plays an important role in mitigating agricultural risk shocks,stabilizing farmers’ income and ensuring national food security under the background of global warming and frequent natural disasters.In 2021,China’s agricultural insurance premium income was up to 96.5 billion yuan,providing risk protection of 4.78 trillion yuan to188 million households.It is an important research topic whether the rapid development of agricultural insurance can really “protect” the agricultural production of family farms and promote the realization of agricultural modernization and rural revitalization in China.Based on the above discussion,this paper took the planting family farms as an example to discuss the impact of agricultural insurance on the production behaviors and income of family farms,which is of important theoretical and practical significance.The research objectives of this paper are,through constructing a theoretical framework of agricultural insurance affecting family farms’ production behaviors and income,to explore the internal mechanism,empirically analysize the impact of agricultural insurance on family farms’ production behaviors,and verify the results of the changes in family farms’ production behaviors under the influence of agricultural insurance as well as the extent of the impact of the acting paths,so as to promote the high-quality development of agricultural insurance,the realization of agricultural modernization and rural revitalization.Therefore,taking 383 family farms of planting industry in Shandong Province as examples and on the basis of building a theoretical framework of agricultural insurance affecting the production behaviors and income of family farms,this paper empirically analyzed the impact of agricultural insurance on family farms’ land elements input behavior,agricultural technology adoption behavior and planting structure selection behavior,and then further tested the corresponding results.The main research conclusions are as follows:Firstly,the scale of agricultural insurance in Shandong Province is continuously expanding,and the support policies for family farms are increasingly improved.The agricultural insurance premium income and compensation expenditure in Shandong Province have steadily increased,the insurance coverage has steadily expanded,the proportion of subsidies has continuously increased,the types of subsidies and the number of insured farmers have continuously increased,the role of agricultural insurance in supporting agriculture and benefiting farmers has continuously played,and the functions of “firewall”and “safety net” have become increasingly prominent.Shandong Province has continuously issued relevant policies to simplify the conditions and procedures for the registration of family farms,carry out the cultivation of provincial demonstration family farms,increase financial support,strengthen the dynamic management of family farms,organize training programs to improve the production skills and management level of family farmers,so as to support the development of family farms in an all-round way.Secondly,agricultural insurance has a promoting effect on family farms’ land elements input behavior,which is demonstrated by the fact that there was a significant positive relationship between the agricultural insurance participation behavior of family farms and their planting scale.The scale of family farms participating in agricultural insurance has expanded to a higher degree than that of the family farms not participating in agricultural insurance.With the centralized and large-scale development of land,family farms are facing with more serious and complex agricultural risks than ordinary farmers.Once encountering risks,family farms are likely to suffer unbearable blows.In this case,agricultural insurance can increase the expected income of family farms by dispersing risks and making up losses,thereby promoting them to transfer more land,expand the production scale and ensure national food security.Thirdly,agricultural insurance has a positive role in promoting family farms’ agricultural technology adoption behaviors,and this role is heterogeneous.According to the resource endowment characteristics of family farms,they prefer to adopt “capital increasing—labor stabilizing—insurance increasing” technology,“capital increasing—labor saving—insurance increasing” technology and “capital increasing—labor saving—insurance controlling”technology.This paper selects new variety technology,water-saving irrigation technology and mechanical technology respectively on behalf of these three types of technologies to carry out analysis and finds out that agricultural insurance can promote the adoption of these three technologies in family farms.According to the heterogeneity of family farms,crop attributes,agricultural income proportion and risk preference are introduced as moderating variables to conduct moderating effect analysis.The results show that risk preference has a positive moderating effect on the process of agricultural insurance affecting family farms’ new variety technology adoption,water-saving irrigation technology adoption and mechanical technology adoption;the proportion of agricultural income has a positive moderating effect only when agricultural insurance affects the adoption of water-saving irrigation technology and mechanical technology of family farms;in terms of crop attributes,compared with cash crops,agricultural insurance plays a greater role in promoting the adoption of water-saving irrigation technology and mechanical technology in family farms planting food crops.Fourthly,agricultural insurance has a positive incentive effect on family farms’ specialized planting;specifically,agricultural insurance has a substitution effect on family farms’ diversified planting.In reality,agricultural insurance and diversified planting are both risk management tools,and family farms are engaged in diversified planting to a certain extent to disperse risks.Although diversified planting can smooth the agricultural risks of family farms among different crops,it belongs to “self-insurance” and fails to externalize the agricultural production risks.While agricultural insurance can externalize the agricultural production risks and reduce efficiency losses caused by diversified planting,so it plays an important role in reducing production costs of family farms and realizing scale effect.On this basis,this paper further conducts quantile regression analysis and finds that for family farms with specific observation characteristics,that is,different levels of diversified planting,the substitution effect of agricultural insurance on their specialized planting is different.This is demonstrated by the fact that the substitution effect of agricultural insurance on diversified planting increases with the increase of the degree of diversified planting.Fifthly,agricultural insurance affects family farms’ income by influencing their production behaviors.By establishing a parallel multiple intermediary effect model,this paper verifies that the results of agricultural insurance changing the family farms’ land input behavior,agricultural technology adoption behavior and planting structure selection behavior are ultimately manifested in promoting their income;that is,the three production behaviors mentioned above play an intermediary role in the process of agricultural insurance affecting family farms’ income.By comparing the proportion of intermediary effects of the intermediary variables,it is found that agricultural insurance plays the largest role in increasing family farms’ income through promoting them to increase land elements input;agricultural insurance plays the second role in increasing family farms’ income through promoting their specialized planting;and agricultural insurance plays the smallest role in increasing family farms’ income through promoting their mechanical technology adoption behavior.This result shows that at the current development stage of family farms,scale expanding is the key path for agricultural insurance to increase family farms’ income.Through the above research,the overall contribution of this paper is as follows: first,according to the risk aversion theory and expected utility theory,this paper reveals the mechanism that through its risk protection function,agricultural insurance improves the expected utility of family farms and then affects their production behavior,which makes up for the lack of theoretical basis due to the simple empirical test in existing studies,and provides theoretical support for evaluating the impact of agricultural insurance on farmers’ production behaviors;second,on the basis family farms’ the goal of maximizing their income,it is proposed that family farms will change their production behaviors from three aspects:expanding production scale,improving production efficiency and saving production costs,so this paper creatively incorporates their land input behavior,agricultural technology adoption behavior and planting structure selection behavior into the same theoretical framework,thus enriching the theoretical analysis of agricultural insurance affecting farmers’ production behaviors;third,it clarifies the impact intensity of family farms’ changing various production behaviors on their income under the influence of agricultural insurance,and finds out the optimal path for agricultural insurance to improve their income.It not only expands the research on the impact of agricultural insurance on farmers’ production behaviors,but also provides a theoretical basis for proposing more targeted agricultural insurance optimization strategies;fourth,it enriches the relevant theories of agricultural insurance affecting farmers’ management decisions from the micro level,avoids the regional fallacy when the existing macro research conclusions are used on the micro level,enriches the application of relevant theories on the micro level,and makes up for the deficiencies of the macro conclusions;fifth,with the guidance of national policies,by focusing on family farms’ agricultural production and operation and taking them as the research objects,this paper not only refines the research on the impact of agricultural insurance on farmers’ behaviors,but also broadens the research of farmers’ behaviors,which can better reflect the role of agricultural insurance in supporting agriculture.