농작물재해보험이 농가 부채에 미치는 영향

Impact of Crop Insurance on Farm Debt

Farmers face various management risks from external factors such as natural disasters, pests, and diseases, and the government has expanded crop insurance to mitigate these risks. According to the risk balancing theory, crop insurance may reduce business risk and encourage greater debt use. While this relationship has been widely studied abroad, no empirical evidence exists for Korea. To address this gap, this paper evaluates the impact of crop insurance on farm debt in Korea. The findings show that crop insurance increases farm debt by approximately 143-149% for the treated farmers (ATET) and by around 171% for the overall farm population (ATE). In addition, when agricultural debt is used as the dependent variable, crop insurance is found to increase agricultural debt by 184-219% (ATET) and by about 199% (ATE). The results provide empirical evidence that crop insurance may encourage greater debt use, supporting the risk balancing theory.