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Risk Attitude, Technical Efficiency and Adoption: An Integrated Approach to Climate-Smart Rice Production in the Jianghan Plain, China

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  • Tong, Q.
  • Swallow, B.
  • Zhang, L.
  • Zhang, J.

Abstract

Rice production in China is under pressure to adapt to changing weather conditions and mitigate greenhouse gas emissions. This paper explores the possibilities for achieving climate-smart agriculture among rice farmers in the Jianghan Plain of China. Data for 873 rice plots are analyzed using Stochastic Frontier Analysis to simultaneously estimate a production function and factors associated with technical efficiency. The production analysis shows the importance of climate variables to production, while use of climate-smart practices, including insurance, conservation tillage, and crop rotations all have the extra benefit of reducing technical inefficiency. However, risk aversion complicates these relationships. We found that most farmers are risk averse and that risk aversion has a negative effect on technical efficiency and U-shaped effects on the purchase of insurance and use of soil-conserving practices. Soil conserving practices are least likely to be used by risk neutral farmers, while insurance is most likely to be purchased by risk neutral farmers. Crop insurance that appeals to the most risk averse farmers appears to be a high priority for encouraging climate-smart agriculture in this region where climate has such large impacts on crop production. Acknowledgement : The authors gratefully acknowledge ?nancial support from the Natural Sciences Foundation of China (41501213); the Fundamental Research Funds for the Central Universities (2662017PY045); the Key Project for Studies of Philosophy and Social Sciences by Ministry of Education (15JZD014); the program of China Scholarship Council (No. 201706760038).

Suggested Citation

  • Tong, Q. & Swallow, B. & Zhang, L. & Zhang, J., 2018. "Risk Attitude, Technical Efficiency and Adoption: An Integrated Approach to Climate-Smart Rice Production in the Jianghan Plain, China," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277311, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae18:277311
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