IDEAS home Printed from https://ideas.repec.org/a/wly/jintdv/v35y2023i6p1080-1098.html

Risk preferences and management strategies of farmers in Ghana: Does the type of crop grown matter?

Author

Listed:
  • Richard Kofi Asravor
  • Daniel Bruce Sarpong

Abstract

This paper examined the risk preferences and management strategies of cereal and legume farmers of Ghana's savannah zones using both the exploratory factor analysis and the linear regression model. Using primary cross‐sectional data and employing the multistage sampling technique made up of purposive, cluster and random sampling techniques, the paper found that cereal farmers are more risk averse than legume farmers. Rainfall variability was ranked topmost by cereals and legumes farmers. Both cereal and legume farmers employ multiple but dissimilar risk management strategies to manage these sources of risk. The commonest sources of risk to cereal and legume farmers were climate and market risk, while off‐farm activities are the commonest management strategy. Production risk faced by cereal farmers was managed by both off‐farm and farm production strategies whereas human risk faced by legumes farmers was managed by both off‐farm and financial management strategies. The importance of market risk implies that policy initiatives should aim at reducing market‐related risks by focusing on increasing off‐farm opportunities for rural households.

Suggested Citation

  • Richard Kofi Asravor & Daniel Bruce Sarpong, 2023. "Risk preferences and management strategies of farmers in Ghana: Does the type of crop grown matter?," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(6), pages 1080-1098, August.
    • Handle: RePEc:wly:jintdv:v:35:y:2023:i:6:p:1080-1098
    DOI: 10.1002/jid.3719
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/jid.3719
    Download Restriction: no
    File URL: https://libkey.io/10.1002/jid.3719?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Achille Barnabé Assouto & Denis Acclassato Houensou & Gervasio Semedo, 2020. "Price risk and farmers’ decisions: A case study from Benin," Post-Print hal-03533062, HAL.
    2. Hans P. Binswanger, 1980. "Attitudes Toward Risk: Experimental Measurement in Rural India," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(3), pages 395-407.
    3. Kurukulasuriya, Pradeep & Mendelsohn, Robert, 2008. "Crop switching as a strategy for adapting to climate change," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 2(01), pages 1-22, March.
    4. Richard Kofi Asravor, 2018. "Livelihood Diversification Strategies to Climate Change among Smallholder Farmers in Northern Ghana," Journal of International Development, John Wiley & Sons, Ltd., vol. 30(8), pages 1318-1338, November.
    5. Manuela Meraner & Robert Finger, 2019. "Risk perceptions, preferences and management strategies: evidence from a case study using German livestock farmers," Journal of Risk Research, Taylor & Francis Journals, vol. 22(1), pages 110-135, January.
    6. Kinfe G. Bishu & Seamus O’Reilly & Edward Lahiff & Bodo Steiner, 2018. "Cattle farmers’ perceptions of risk and risk management strategies: evidence from Northern Ethiopia," Journal of Risk Research, Taylor & Francis Journals, vol. 21(5), pages 579-598, May.
    7. Mahmud Yesuf & Randall A. Bluffstone, 2009. "Poverty, Risk Aversion, and Path Dependence in Low-Income Countries: Experimental Evidence from Ethiopia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 1022-1037.
    8. Luisa Menapace & Gregory Colson & Roberta Raffaelli, 2016. "A comparison of hypothetical risk attitude elicitation instruments for explaining farmer crop insurance purchases," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 43(1), pages 113-135.
    9. Kinfe Gebreegziabher & Tewodros Tadesse, 2014. "Risk perception and management in smallholder dairy farming in Tigray, Northern Ethiopia," Journal of Risk Research, Taylor & Francis Journals, vol. 17(3), pages 367-381, March.
    10. Akramov, Kamiljon T. & Malek, Mehrab, 2012. "Analyzing profitability of maize, rice, and soybean production in Ghana: Results of PAM and DEA analysis," GSSP working papers 28, International Food Policy Research Institute (IFPRI).
    11. Daniel Hellerstein & Nathaniel Higgins & John Horowitz, 2013. "The predictive power of risk preference measures for farming decisions -super-†," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 40(5), pages 807-833, December.
    12. Salvatore Falco & Marcella Veronesi, 2018. "Managing Environmental Risk in Presence of Climate Change: The Role of Adaptation in the Nile Basin of Ethiopia," Natural Resource Management and Policy, in: Leslie Lipper & Nancy McCarthy & David Zilberman & Solomon Asfaw & Giacomo Branca (ed.), Climate Smart Agriculture, pages 497-526, Springer.
    13. Sachiko Miyata, 2003. "Household's risk attitudes in Indonesian villages," Applied Economics, Taylor & Francis Journals, vol. 35(5), pages 573-583.
    14. Dewan Ali Ahsan, 2011. "Farmers' motivations, risk perceptions and risk management strategies in a developing economy: Bangladesh experience," Journal of Risk Research, Taylor & Francis Journals, vol. 14(3), pages 325-349, March.
    15. F. van Winsen & Y. de Mey & L. Lauwers & S. Van Passel & M. Vancauteren & E. Wauters, 2016. "Determinants of risk behaviour: effects of perceived risks and risk attitude on farmer's adoption of risk management strategies," Journal of Risk Research, Taylor & Francis Journals, vol. 19(1), pages 56-78, January.
    16. Martin, Sandra, 1996. "Risk Management Strategies in New Zealand Agriculture and Horticulture," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 64(01), pages 1-14, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bishu, Kinfe & O'Reilly, Seamus & Lahiff, Edward & Steiner, Bodo, 2016. "Cattle farmers’ perceptions of risk and risk management strategies," MPRA Paper 74954, University Library of Munich, Germany.
    2. Giampietri, Elisa & Yu, Xiaohua & Trestini, Samuele, . "The role of trust and perceived barriers on farmer’s intention to adopt risk management tools," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 9(01).
    3. Feyisa, Ashenafi Duguma & Maertens, Miet & de Mey, Yann, 2023. "Relating risk preferences and risk perceptions over different agricultural risk domains: Insights from Ethiopia," World Development, Elsevier, vol. 162(C).
    4. Jayanti Mala Nayak & A V Manjunatha, 2019. "Risk sources and management strategies of farmers: Evidence from mahanadi river basin of Odisha in India," Working Papers 436, Institute for Social and Economic Change, Bangalore.
    5. Gloede, Oliver & Menkhoff, Lukas & Waibel, Hermann, 2015. "Shocks, Individual Risk Attitude, and Vulnerability to Poverty among Rural Households in Thailand and Vietnam," World Development, Elsevier, vol. 71(C), pages 54-78.
    6. Nauges, Céline & Bougherara, Douadia & Koussoubé, Estelle, 2021. "Fertilizer use and risk: New evidence from Sub-Saharan Africa," TSE Working Papers 21-1266, Toulouse School of Economics (TSE).
    7. Raghavendra Kushawaha & Naresh Kumar Sharma, 2025. "Risk behavior among farmers: examining expected utility and prospect theory approach," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 27(1), pages 20-46, April.
    8. de Brauw, Alan & Eozenou, Patrick, 2014. "Measuring risk attitudes among Mozambican farmers," Journal of Development Economics, Elsevier, vol. 111(C), pages 61-74.
    9. Pham, Huong Dien, 2017. "Do cultural factors alter the relationship between risk attitudes and economic welfare?," TVSEP Working Papers wp-003, Leibniz Universitaet Hannover, Institute for Environmental Economics and World Trade, Project TVSEP.
    10. Thi Tam Duong & Tom Brewer & Jo Luck & Kerstin Zander, 2019. "A Global Review of Farmers’ Perceptions of Agricultural Risks and Risk Management Strategies," Agriculture, MDPI, vol. 9(1), pages 1-16, January.
    11. Joseph Cook & Susmita Chatterjee & Dipika Sur & Dale Whittington, 2013. "Measuring risk aversion among the urban poor in Kolkata, India," Applied Economics Letters, Taylor & Francis Journals, vol. 20(1), pages 1-9, January.
    12. Arianna Galliera & E. Elisabet Rutström, 2021. "Crowded out: Heterogeneity in risk attitudes among poor households in the US," Journal of Risk and Uncertainty, Springer, vol. 63(2), pages 103-132, October.
    13. Ahsanuzzaman, & Priyo, Asad Karim Khan & Nuzhat, Kanti Ananta, 2022. "Effects of communication, group selection, and social learning on risk and ambiguity attitudes: Experimental evidence from Bangladesh," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 96(C).
    14. Patil, V. & Veettil, P.C., 2018. "Experimental Evidence of Risk Attitude of Farmers from Risk-Preference Elicitation in India," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277331, International Association of Agricultural Economists.
    15. Fabio G., Santeramo & Ilaria, Russo & Emilia, Lamonaca, 2022. "Italian subsidised crop insurance: what the role of policy changes," MPRA Paper 115299, University Library of Munich, Germany.
    16. Rommel, Jens & Hermann, Daniel & Müller, Malte & Mußhoff, Oliver, 2016. "Comparing The Predictive Power Of Risk Elicitation Instruments: Experimental Evidence From German Farmers," 56th Annual Conference, Bonn, Germany, September 28-30, 2016 244759, German Association of Agricultural Economists (GEWISOLA).
    17. Stefanos A. Nastis & Konstadinos Mattas & George Baourakis, 2019. "Understanding Farmers’ Behavior towards Sustainable Practices and Their Perceptions of Risk," Sustainability, MDPI, vol. 11(5), pages 1-13, March.
    18. Henning Schaak & Jens Rommel & Julian Sagebiel & Jesus Barreiro-Hurlé & Douadia Bougherara & Luigi Cembalo & Marija Cerjak & Tajana Čop & Mikołaj Czajkowski & María Espinosa-Goded & Julia Höhler & Car, 2024. "Who Can Predict Farmers' Choices in Risky Gambles?," Post-Print hal-04677299, HAL.
    19. Ruishi Si & Xueqian Zhang & Yumeng Yao & Qian Lu, 2022. "Risk Preference, Health Risk Perception, and Environmental Exposure Nexus: Evidence from Rural Women as Pig Breeders, China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 162(1), pages 151-178, July.
    20. Freudenreich, Hanna & Musshoff, Oliver, 2022. "Experience of losses and aversion to uncertainty - experimental evidence from farmers in Mexico," Ecological Economics, Elsevier, vol. 195(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:jintdv:v:35:y:2023:i:6:p:1080-1098. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/journal/5102/home .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.