Impact of Agricultural Insurance on the Growth of Total Factor Productivity of Farmers

The growth of agricultural total factor productivity is of great significance to the improvement of China's total factor productivity, the increase in farmers' income and the guarantee of food security. As agricultural production and farmers' income are faced with natural risks, the implementation of related policies of agricultural insurance helps to diversify and transfer these risks, thus affecting the growth of total factor productivity of farmers. Based on the data from the National Rural Fixed Observation Point Database of the Ministry of Agriculture and Rural Affairs from 2003 to 2017, this paper analyzes the impact of agricultural insurance coverage on the total factor productivity of farmers by using dynamic panel estimation and instrumental variable method, and explores the underlying influencing mechanism. The results show that the increase in agricultural insurance coverage in China has promoted the growth of total factor productivity of farmers. In the central and western regions, and when farmers are non-rural cadres, non-ethnic minorities and in low-income groups, agricultural insurance plays a more significant role in promoting the total factor productivity of farmers. In addition, the rise in agricultural insurance coverage can improve the total factor productivity of farmers by increasing their investment in pesticide and machinery, expanding their farmland scale and encouraging farmers to adopt new technologies.