Does Policy-oriented Agricultural Insurance Increase Farmers’ Income?

Due to the particularity of crop insurance market,crop insurance can not fully commercial operation.The policy-oriented crop insurance system of premium subsidy has become a risk management tool for the government to support agricultural development.In 2007,China carried out a pilot project of policy based crop insurance in six provinces,and achieved provincial-level coverage in 2012.This paper takes the exogenous impact of policy-oriented crop insurance pilot in county level as a quasinatural experiment,focusing on the impact of progressive policy pilot on the annual growth rate of per capita net income of farmers.First of all,this paper uses the progressive DID model to analyze all county-level units.After conducting the relevant robustness test,it is found that the policy-based agricultural insurance system has significantly increase farmers’ income,but the effect of the policy lasts for a short time.Secondly,this paper attempts to build a bridge of basic results to analyze the main mechanism.From the perspective of agricultural production after participating in the insurance,it promotes regional specialized planting and agricultural element input;in terms of risk sharing,it helps reduce the risk of loss due to natural disasters.Finally,after analyzing the heterogeneity of the samples,we found that the policy effect is stronger in poorer and main-grain production county,as well as in areas with greater insurance depth.Combining the conclusions and background,we end this paper by three policy recommendations,such as optimizing the structure of financial subsidies,increasing the participation rate of agricultural insurance,and improving agricultural insurance compensation.