The Impact of Policy-Oriented Agricultural Insurance on the Non-Grain Conversion of Cultivated Land Under the “Risk–Return” Decision-Making Framework

With the steady advancement of industrialization and urbanization, farmers have been increasingly motivated by economic interests to cultivate cash crops with higher returns, leading to the growing prominence of the non-grain conversion of cultivated land. As a major policy instrument for safeguarding returns and mitigating risks, policy-oriented agricultural insurance may alter farmers’ planting decisions and achieve fundamental adjustments in crop planting structures, thereby playing an important role in addressing the challenge of non-grain conversion of cultivated land. Therefore, based on the “risk–return” decision-making framework, this study employs a multi-period difference-in-differences model and provincial panel data from 31 provinces in China during 2013–2023 to investigate the effects and mechanisms of the pilot programs of full-cost insurance and planting income insurance on the non-grain conversion of cultivated land. The results indicate that policy-oriented agricultural insurance significantly inhibits the non-grain conversion of cultivated land and suppresses such conversion through promoting large-scale agricultural land operation and improving the comparative returns to grain production. The heterogeneity analysis reveals that the inhibitory effect of policy-oriented agricultural insurance on non-grain conversion is more pronounced among new agricultural business entities, high-quality cultivated land, and regions with higher levels of natural risks. Accordingly, this study recommends implementing differentiated insurance policies based on cultivated land quality, natural risk levels, and cultivated land transfer entities across regions, and constructing a policy coordination system integrating “fiscal support–insurance–finance” to fully enhance policy effectiveness.