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Smallholder Risk Management in Developing Countries

Author

Listed:
  • Dalila Cervantes-Godoy

    (OECD)

  • Shingo Kimura

    (OECD)

  • Jesús Antón

    (OECD)

Abstract

This paper addresses various aspects of risk and risk management for smallholders in developing countries, and presents a quantitative assessment of farm-level risks and risk management strategies in three emerging economies: Brazil, China and Viet Nam. The analysis covers production, income, and poverty risks. Institutional and political settings in developing countries are frequently less developed and this contributes to a greater incidence of market imperfections in key areas such as credit and insurance, and which in turn lowers farmers’ access to risk management tools and strategies. The result is a widespread reliance on informal mechanisms and community strategies. The effects of risk and responses to risk are also different in developing countries, with smallholders often forced to rely on strategies that perpetuate poverty. When risk is an important consideration in a farm household’s decision on sector transition, insurance or safety-net mechanisms could assist these households to make that transition. The analysis of two regions in Viet Nam shows that those households able to successfully transit to the non-farm sector continued to maintain small plots of land for self-consumption, suggesting that agriculture remains a kind of safety net.

Suggested Citation

  • Dalila Cervantes-Godoy & Shingo Kimura & Jesús Antón, 2013. "Smallholder Risk Management in Developing Countries," OECD Food, Agriculture and Fisheries Papers 61, OECD Publishing.
  • Handle: RePEc:oec:agraaa:61-en
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    File URL: http://dx.doi.org/10.1787/5k452k28wljl-en
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    Cited by:

    1. Isaac Koomson & Simplice A. Asongu, 2016. "Relative Contribution of Child Labour to Household Farm and Non-Farm Income in Ghana: Simulation with Child's Education," African Development Review, African Development Bank, vol. 28(1), pages 104-115, March.
    2. repec:asi:aeafrj:2017:p:700-721 is not listed on IDEAS

    More about this item

    Keywords

    agricultural policy; agricultural risk; developing countries; risk management strategies; smallholders;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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