The Impact of Policy-Oriented Crop Insurance on Technical Efficiency-A Case for Rice Farmers in China

The purpose of this paper was to analyze the impact of policy-oriented crop insurance on crop yield among rice farmers in China. The population used in this paper consisted of rice farmers. We used stratified multi-stage cluster sampling approach to collect data and face to face interviewed with 502 farmers in three different climate regions: cold, temperate and tropical during 2010-2011 crop years. The corrected ordinary least square was used to determine farmers' technical efficiency. The paper adds to findings that policy-oriented crop insurance has positive effect on temperate and tropical regions. However, there was non-significant yield difference between insured and uninsured farmers in cold region. As a conclusion, technical efficiency of crop production is a function of policy-oriented crop insurance as well as other variables such as yield risk management practices, personal characteristics and fair distribution of crop inputs.