Policy Experimentation for Sustainable Agriculture: How China’s Policy-Based Agricultural Insurance Enhances Grain Production Resilience

Abstract Under the new normal of intensified climate change and overlapping systemic risks, building a resilient grain production system has become a core objective of national food security strategies. This study employs provincial panel data from 2013 to 2022 to measure grain production resilience using the Entropy Weight-Technique for Order Preference by Similarity to an Ideal Solution method and evaluates the impact of policy-oriented agricultural insurance through a quasi-natural experiment framework based on China’s full-cost and income insurance pilots. Key findings reveal that: (1) Policy-based agricultural insurance significantly enhances grain production resilience, a conclusion robust to placebo tests, subsample analyses, and Propensity Score Matching-Difference-in-differences validation. (2) The policy effect is more pronounced in northern China compared to southern regions, attributed to larger farming scales and higher climate risk exposure. (3) Mechanism analysis demonstrates that agricultural insurance strengthens resilience by promoting scale operations and increasing the grain replanting index. Accordingly, policy recommendations are proposed to refine insurance product design, enhance regional policy targeting, strengthen institutional coordination, and establish a dynamic monitoring framework, with the goal of improving the effectiveness of policy-based agricultural insurance in building a resilient and sustainable grain production system.