Role of Policy-Supported Hog Insurance in Promoting Green Total Factor Productivity: The Case of China during 2005–2021

Abstract

Hog insurance and rural environmental protection are complementary to each other. Studying the environmental effects of hog insurance is imperative for safeguarding food safety and promoting the long-term development of the agricultural insurance industry. Informed by the risk management theory and sustainable development theory, this paper constructs a theoretical framework for the impact of policy-supported hog insurance on the green total factor productivity (GTFP) of hog farming. Utilizing panel data from China’s hog-dominant production areas spanning from 2005 to 2021, the slacks-based measures of directional distance functions (SBM-DDF) model and multiple-time-point difference-in-differences (DID) approach were used to measure GTFP and explore the effects of hog insurance on GTFP and the underlying mechanisms. The findings indicate a substantial enhancement in GTFP due to hog insurance. The conclusion drawn was robust to various tests. The mechanism is that hog insurance fosters GTFP by expanding the breeding scale, adjusting the planting–breeding structure, and promoting technological progress. Furthermore, the environmental effects of hog insurance policy are more pronounced in economically developed regions, with significant effects observed on the GTFP of free-range, small-scale, and medium-scale hog-farming households. This study contributes new evidence to the field of assessing the environmental impact of agricultural insurance policies and provides valuable insights for furthering green transformation and development in the hog insurance-supported breeding industry.