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Farmers’ risk preference and the adoption of risk management strategies in Northern Ghana

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  • Richard Kofi Asravor

Abstract

The study used the hypothetical lottery-choice questions to measure risk aversion and a detailed survey collected data on input use, farm production and non-farm activities to specifically assess whether risk aversion, risk perceptions, and socioeconomic factors affect the risk management strategies of farm households in Northern Ghana. Risk aversion significantly increases crop diversification strategies of households but marginally reduces herbicide use by households. Market risk significantly increases the use of improved seed varieties and the application of inorganic fertiliser but reduces diversification into livestock production. Production risk largely increases diversification into livestock production. Farmers’ risk management strategies are affected by socioeconomic variables such as access to extension services, area cultivated, age and gender. Policy effort focused on building pliable on-farm crop related risk management strategies should aim at considering the risk aversion and the perception of market risk whilst those focused on livestock should focus on production risk.

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  • Richard Kofi Asravor, 2019. "Farmers’ risk preference and the adoption of risk management strategies in Northern Ghana," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 62(5), pages 881-900, April.
    • Handle: RePEc:taf:jenpmg:v:62:y:2019:i:5:p:881-900
    DOI: 10.1080/09640568.2018.1452724
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    Cited by:

    1. Mingyue Li & Jingjing Wang & Kai Chen & Lianbei Wu, 2020. "Willingness and Behaviors of Farmers’ Green Disposal of Pesticide Packaging Waste in Henan, China: A Perceived Value Formation Mechanism Perspective," IJERPH, MDPI, vol. 17(11), pages 1-18, May.
    2. Toritseju Begho, 2021. "Using Farmers’ Risk Tolerance to Explain Variations in Adoption of Improved Rice Varieties in Nepal," Journal of South Asian Development, , vol. 16(2), pages 171-193, August.
    3. Doan Nainggolan & Faizal Rahmanto Moeis & Mette Termansen, 2023. "Does risk preference influence farm level adaptation strategies? – Survey evidence from Denmark," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 28(7), pages 1-23, October.
    4. Nuru Kipato & Peter Dorward & Graham Clarkson, 2023. "A Lower Threat than I Thought: How the Analysis of the Interdependence between Risks Influences Smallholder Farmers’ Perceptions," Sustainability, MDPI, vol. 15(19), pages 1-19, October.
    5. Lishi Mao & Junfeng Song & Siyuan Xu & Degui Yu, 2023. "Impact of Digital Platform Organization on Reducing Green Production Risk to Tackle COVID-19: Evidence from Farmers in Jiangsu China," Agriculture, MDPI, vol. 13(1), pages 1-16, January.
    6. Wira Abu Bakar & Rabihah Md Sum, 2020. "Agriculture Risk Management: A Case Study on Rock Melon Farm in Sepang, Selangor, Malaysia," Food & Agribusiness Management (FABM), Zibeline International Publishing, vol. 1(2), pages 75-82, June.
    7. Muhammad Farhan & Muhammad Asim Yasin & Khuda Bakhsh & Rafaqet Ali & Sami Ullah & Saad Munir, 2022. "Determinants of risk attitude and risk perception under changing climate among farmers in Punjab, Pakistan," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 114(2), pages 2163-2176, November.
    8. Patrick Opoku Asuming, 2023. "Risk attitudes and asset diversification: Evidence from Ghana," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(5), pages 915-960, July.
    9. Sven Grüner, 2022. "Rethinking how risk aversion and impatience are linked with cognitive ability: experimental findings from agricultural students and farmers," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 11(3), pages 248-259, July.
    10. Mingyue Li & Yu Liu & Yuhe Huang & Lianbei Wu & Kai Chen, 2022. "Impacts of Risk Perception and Environmental Regulation on Farmers’ Sustainable Behaviors of Agricultural Green Production in China," Agriculture, MDPI, vol. 12(6), pages 1-20, June.
    11. Dula Etana & Denyse J. R. M. Snelder & Cornelia F. A. van Wesenbeeck & Tjard de Cock Buning, 2020. "Dynamics of Smallholder Farmers’ Livelihood Adaptation Decision-Making in Central Ethiopia," Sustainability, MDPI, vol. 12(11), pages 1-26, June.

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