The Impact of Agricultural Insurance Development on Farmers' Disposable Income in China

Research Article
Open access

The Impact of Agricultural Insurance Development on Farmers' Disposable Income in China

Chuwen Guo 1*
  • 1 Donghua University    
  • *corresponding author 2279864928@qq.com
AEMPS Vol.191
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-80590-189-1
ISBN (Online): 978-1-80590-190-7

Abstract

As a critical policy tool for mitigating agricultural risks and stabilizing farmers’ incomes, agricultural insurance has been the subject of extensive scholarly investigation. However, there is still no consensus regarding the relationship between agricultural insurance and farmers' income, and the mechanism by which agricultural insurance affects farmers' disposable income requires further empirical examination. In this study, farmers’ disposable income is taken as the dependent variable, and agricultural insurance development is measured across three dimensions: coverage density, coverage depth, and compensation efficiency. The entropy method is applied to integrate these indicators into a composite index used as the independent variable. Control variables include urbanization rate, per capita crop-sown area, the proportion of the primary industry, and fiscal support for agriculture. Using panel data from 30 provincial-level administrative regions in China (excluding Hong Kong, Macau, Taiwan, and Tibet) for the period 2014–2024, a two-way fixed effects model is constructed. The empirical results reveal that a one-unit increase in agricultural insurance development leads to a statistically significant 1.098-unit increase in farmers’ disposable income (p < 0.01), though the effect is partially diluted by control variables. Urbanization (β = 4.349) exhibits a structural substitution effect through non-agricultural employment, while fiscal support for agriculture (β = 0.001) synergistically boosts income through infrastructure improvements. In contrast, per capita sown area (β = -0.048) negatively moderates insurance efficiency due to its reliance on natural resources. A regional heterogeneity analysis reveals that the income-enhancing effect of insurance is significant in the eastern (β = 2.027) and central (β = 2.155) regions (p < 0.01), but only marginally significant in the western region (β = 0.323, p < 0.1), reflecting the moderating role of economic development and agricultural modernization. The model passes tests for endogeneity using lagged terms and for robustness using 1% winsorization. Based on these findings, this study recommends enhancing insurance density and depth, optimizing product design and claims efficiency, and improving fiscal subsidies and agricultural modernization to effectively boost farmers’ disposable income.

Keywords:

Agricultural insurance development, Farmers’ disposable income, Panel model

Guo,C. (2025). The Impact of Agricultural Insurance Development on Farmers' Disposable Income in China. Advances in Economics, Management and Political Sciences,191,23-32.
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References

[1]. Ma, Z. H., Zhang, M. Y., & Xia, Y. G. (2024). The impact of agricultural insurance on farmers’ income: Based on spatial econometrics and the system GMM model. Journal of Anhui University of Technology (Social Science Edition), 41(4), 1–5.

[2]. Sang, K. P., & Jiao, N. (2024). A study on the impact of agricultural insurance on farmers’ income: Based on provincial panel data from 2013 to 2021. Agricultural Outlook, 20(8), 51–56.

[3]. Xu, J. (2022). An analysis of the impact of agricultural insurance on farmers’ income: A case study of six central provinces. Journal of Anhui Agricultural Sciences, 50(22), 211–214.

[4]. Zhang, R. (2022). A study on the impact of agricultural insurance development on farmers’ income: Based on interprovincial panel data in China. Journal of Henan University of Animal Husbandry and Economy, 35(5), 35–40.

[5]. Cui, L. (2023). A study on the impact of agricultural insurance development on farmers’ income: Evidence from agricultural insurance in western China. Heilongjiang Finance, (12), 64–70.

[6]. Huang, Y., & Lü, D. H. (2021). Agricultural insurance, factor allocation, and farmers’ income. Journal of South China Agricultural University (Social Science Edition), 20(2), 41–53.

[7]. Zheng, J., & Fang, T. (2019). The anti-poverty effect of agricultural insurance coverage level. Journal of Shanxi Agricultural University (Social Science Edition), 18(4), 41–48.

[8]. Ren, Y. S., & Sun, X. L. (2024). An empirical study on the impact of agricultural insurance on farmers’ income in Inner Mongolia. Farm Economy and Management, (9), 36–40.

Cite this article

Guo,C. (2025). The Impact of Agricultural Insurance Development on Farmers' Disposable Income in China. Advances in Economics, Management and Political Sciences,191,23-32.

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The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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About volume

Volume title: Proceedings of ICEMGD 2025 Symposium: The 4th International Conference on Applied Economics and Policy Studies

ISBN：978-1-80590-189-1(Print) / 978-1-80590-190-7(Online)
Editor：Florian Marcel Nuţă , Xuezheng Qin
Conference website: https://www.icemgd.org/
Conference date: 20 September 2025
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.191
ISSN：2754-1169(Print) / 2754-1177(Online)

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References

[1]. Ma, Z. H., Zhang, M. Y., & Xia, Y. G. (2024). The impact of agricultural insurance on farmers’ income: Based on spatial econometrics and the system GMM model. Journal of Anhui University of Technology (Social Science Edition), 41(4), 1–5.

[2]. Sang, K. P., & Jiao, N. (2024). A study on the impact of agricultural insurance on farmers’ income: Based on provincial panel data from 2013 to 2021. Agricultural Outlook, 20(8), 51–56.

[3]. Xu, J. (2022). An analysis of the impact of agricultural insurance on farmers’ income: A case study of six central provinces. Journal of Anhui Agricultural Sciences, 50(22), 211–214.

[4]. Zhang, R. (2022). A study on the impact of agricultural insurance development on farmers’ income: Based on interprovincial panel data in China. Journal of Henan University of Animal Husbandry and Economy, 35(5), 35–40.

[5]. Cui, L. (2023). A study on the impact of agricultural insurance development on farmers’ income: Evidence from agricultural insurance in western China. Heilongjiang Finance, (12), 64–70.

[6]. Huang, Y., & Lü, D. H. (2021). Agricultural insurance, factor allocation, and farmers’ income. Journal of South China Agricultural University (Social Science Edition), 20(2), 41–53.

[7]. Zheng, J., & Fang, T. (2019). The anti-poverty effect of agricultural insurance coverage level. Journal of Shanxi Agricultural University (Social Science Edition), 18(4), 41–48.

[8]. Ren, Y. S., & Sun, X. L. (2024). An empirical study on the impact of agricultural insurance on farmers’ income in Inner Mongolia. Farm Economy and Management, (9), 36–40.

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