The role of crop insurance in reducing pesticide use: Evidence from rice farmers in China

Pesticides play a significant role in increasing agricultural yields. However, the overuse of chemical pesticides on crops is a major challenge faced by China, which damages human health, threatens food security, and increases production costs. This paper provides empirical evidence on the relationship between crop insurance and pesticide use. Based on micro-survey data collected from 3410 households, we estimate a control function (CF) approach and find that farmers who purchase crop insurance use 33.30% lower pesticides than those who do not. A series of robustness tests confirm these findings. The results of the moderating effect analysis suggest that rice cultivation training, experience, schooling years, and agricultural laborers can negatively moderate the effect of crop insurance on pesticide use. Furthermore, we also find that the treatment effect of crop insurance is stronger for farmers who are most inclined to purchase crop insurance.