The Impact of Cost-of-Production Insurance on Input Expense of Fruit Growing in Ecologically Vulnerable Areas: Evidence from Shaanxi Province of China

Planting fruit trees in ecologically vulnerable areas is an effective approach to achieving the goal of ecological protection and improving farmers’ livelihoods. However, in ecologically vulnerable areas, farmers still face agricultural production risks such as natural disasters, diseases, and pests...

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Autores principales:	Tao Li, Lihong Chen, Xiaoxu Li, Sha Li, Haibing Chen, Hao Ji
Formato:	article
Lenguaje:	EN
Publicado:	MDPI AG 2021
Materias:	cost-of-production insurance input expense sustainability of fruit grower’ livelihood Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350
Acceso en línea:	https://doaj.org/article/b88fef4faeac48179b39a839d76f9f71
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id	oai:doaj.org-article:b88fef4faeac48179b39a839d76f9f71
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spelling	oai:doaj.org-article:b88fef4faeac48179b39a839d76f9f712021-11-11T19:43:34ZThe Impact of Cost-of-Production Insurance on Input Expense of Fruit Growing in Ecologically Vulnerable Areas: Evidence from Shaanxi Province of China10.3390/su1321120832071-1050https://doaj.org/article/b88fef4faeac48179b39a839d76f9f712021-11-01T00:00:00Zhttps://www.mdpi.com/2071-1050/13/21/12083https://doaj.org/toc/2071-1050Planting fruit trees in ecologically vulnerable areas is an effective approach to achieving the goal of ecological protection and improving farmers’ livelihoods. However, in ecologically vulnerable areas, farmers still face agricultural production risks such as natural disasters, diseases, and pests. In order to help fruit growers avoid these risks and ensure the sustainability of their livelihoods, the Chinese government has launched cost-of-production (COP) insurance in these areas. Although previous studies have shown that the purchase of revenue- or yield-based crop insurance will change insured farmers’ input expense of chemicals in agricultural production, the existing literature lacksa discussion on how COP insurance affects the input expense of chemicals in fruit growing. Here, we address the existing research gap from both theoretical and empirical aspects by conducting surveys in 1051 households of fruit growers in the Shaanxi province of China. Theoretical deduction reveals that the COP insurance on input expenditure of chemicals can have an increasing effect. Using the 2SLS model and empirical analysis, we found that the insured fruit growers spent more on using chemical fertilizers and pesticides compared to non-insured fruit growers. These findings demonstrate that the COP insurance’s positive marginal incentive to apply more input expense of chemicals in production dominates the negative moral hazard effect.Tao LiLihong ChenXiaoxu LiSha LiHaibing ChenHao JiMDPI AGarticlecost-of-production insuranceinput expensesustainability of fruit grower’ livelihoodEnvironmental effects of industries and plantsTD194-195Renewable energy sourcesTJ807-830Environmental sciencesGE1-350ENSustainability, Vol 13, Iss 12083, p 12083 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	cost-of-production insurance input expense sustainability of fruit grower’ livelihood Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350
spellingShingle	cost-of-production insurance input expense sustainability of fruit grower’ livelihood Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350 Tao Li Lihong Chen Xiaoxu Li Sha Li Haibing Chen Hao Ji The Impact of Cost-of-Production Insurance on Input Expense of Fruit Growing in Ecologically Vulnerable Areas: Evidence from Shaanxi Province of China
description	Planting fruit trees in ecologically vulnerable areas is an effective approach to achieving the goal of ecological protection and improving farmers’ livelihoods. However, in ecologically vulnerable areas, farmers still face agricultural production risks such as natural disasters, diseases, and pests. In order to help fruit growers avoid these risks and ensure the sustainability of their livelihoods, the Chinese government has launched cost-of-production (COP) insurance in these areas. Although previous studies have shown that the purchase of revenue- or yield-based crop insurance will change insured farmers’ input expense of chemicals in agricultural production, the existing literature lacksa discussion on how COP insurance affects the input expense of chemicals in fruit growing. Here, we address the existing research gap from both theoretical and empirical aspects by conducting surveys in 1051 households of fruit growers in the Shaanxi province of China. Theoretical deduction reveals that the COP insurance on input expenditure of chemicals can have an increasing effect. Using the 2SLS model and empirical analysis, we found that the insured fruit growers spent more on using chemical fertilizers and pesticides compared to non-insured fruit growers. These findings demonstrate that the COP insurance’s positive marginal incentive to apply more input expense of chemicals in production dominates the negative moral hazard effect.
format	article
author	Tao Li Lihong Chen Xiaoxu Li Sha Li Haibing Chen Hao Ji
author_facet	Tao Li Lihong Chen Xiaoxu Li Sha Li Haibing Chen Hao Ji
author_sort	Tao Li
title	The Impact of Cost-of-Production Insurance on Input Expense of Fruit Growing in Ecologically Vulnerable Areas: Evidence from Shaanxi Province of China
title_short	The Impact of Cost-of-Production Insurance on Input Expense of Fruit Growing in Ecologically Vulnerable Areas: Evidence from Shaanxi Province of China
title_full	The Impact of Cost-of-Production Insurance on Input Expense of Fruit Growing in Ecologically Vulnerable Areas: Evidence from Shaanxi Province of China
title_fullStr	The Impact of Cost-of-Production Insurance on Input Expense of Fruit Growing in Ecologically Vulnerable Areas: Evidence from Shaanxi Province of China
title_full_unstemmed	The Impact of Cost-of-Production Insurance on Input Expense of Fruit Growing in Ecologically Vulnerable Areas: Evidence from Shaanxi Province of China
title_sort	impact of cost-of-production insurance on input expense of fruit growing in ecologically vulnerable areas: evidence from shaanxi province of china
publisher	MDPI AG
publishDate	2021
url	https://doaj.org/article/b88fef4faeac48179b39a839d76f9f71
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The Impact of Cost-of-Production Insurance on Input Expense of Fruit Growing in Ecologically Vulnerable Areas: Evidence from Shaanxi Province of China

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