Innovation of photovoltaic agricultural park model and its value to poverty alleviation and informal insurance : evidence from COVID-19 epidemic

Abstract

I studied a new form of agricultural production with the rapid establishment of photovoltaic parks and empirically test the conjecture that photovoltaic parks can improve agricultural risk resistance. By surveying 202 farmers in and around the six parks, I obtained the basic information of these farmers and their quarterly revenue from 2019 to 2022. Using the contracted farmers in the park as the treatment group and the ordinary farmers around the park as the control group, I exploit the COVID-19 in early 2020 as an exogenous shock, to construct a difference-in-differences model to empirically test the causal impact of parks on farmers' risk resistance ability. The empirical analysis yields prevalent findings. First, after the outbreak of the epidemic, the income of both the treatment group and the control group was significantly impacted, and the operating income, total income, operating cost and net profit were significantly reduced; Second, compared with the farmers in the control group, the business income of the farmers in the treatment group recovered earlier after the epidemic, and basically recovered to the pre-epidemic level after the second half of 2021, but the farmers in the control group never returned to the pre-epidemic level in the late epidemic period, indicating that the ordinary farmers around the park were affected by the epidemic for a long time and irreversible; Third, when the epidemic just broke out, the net profit of the farmers in the treatment group decreased more significantly than that in the control group, but the profit of the treatment group recovered faster and more in the later stage of the epidemic. Those findings indicate that the PV park may jointly affect the operation of farmers from two competitive channels at different time points. In the face of emergencies, the park, due to its own financial advantages Market advantages and channel advantages: during the epidemic period, the management ability is stronger, and there is greater bargaining power when coordinating with the government. Therefore, the production and operation activities of contracted farmers during the epidemic period are less impacted, and production can be resumed more quickly in the late epidemic period. However, the contracted farmers have signed production and operation contracts, so the production plan may not be adjusted quickly in a short period of time. Since the production plan is not flexible enough, the operation expenditure during the epidemic period is still maintained at a high level. The above two mechanisms will jointly affect the profits of farmers. At the beginning of the epidemic, farmers in the park could not quickly reduce their output, and the operating costs remained at a relatively high level, so the net profits will face a greater decline. However, with the passage of time and the weakening of the impact of the epidemic, contracted farmers can recover production and business income more quickly, benefiting from the advantages of the park, making the net profit of contracted farmers exceed that of non contracted farmer.