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Analysis of wheat farmers’ risk perceptions and attitudes: evidence from Punjab, Pakistan

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Abstract

Agriculture involves multiple risks of which environmental and production threats are major ones. Farmers’ risk attitudes and risk perceptions have a significant role in dealing with their decisions, farm-relevant practices and management exposure to risk. Developing countries have carried out limited research work on the variety of risk management issues. This research work quantifies farmers’ attitudes and perceptions of different types of risks, such as which wheat crop is grown. The study relies on a survey of six wheat-producing districts containing household farms with 402 wheat-producing farmers in Punjab, Pakistan. To discover farmer’ attitudes toward risks, the Equally Likely Certainty Equivalent approach has been employed, with the ranking of farmers’ perceptions of four disastrous risk sources, storm rainfall and hail, drought, high input prices and wheat diseases, using a risk matrix. A probit model was employed to analyze the empirical estimation of factors affecting farmers’ attitudes and perceptions. The findings of the study indicate that the majority of the farmers have a risk-averse nature and consider storm rainfall and hail, drought, high input prices and wheat diseases as major threats to their wheat crops. Empirical findings of the study show that gender, religion, age, farming experience, education, credit, farming area, livestock numbers and off-farm income have significant (positive or negative) effects on farmers’ attitudes toward risk and risk perceptions. The study provides a convenient analysis for farmers, researchers, extension services, the agricultural insurance sector, and agriculture policy makers. Policy makers and researchers need to understand farmers’ risk attitudes and risks, providing them with precise knowledge regarding risks and refined risk management tools, and ensuring the provision of agricultural financing and contemporary agricultural extension services.

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Ahmad, D., Afzal, M. & Rauf, A. Analysis of wheat farmers’ risk perceptions and attitudes: evidence from Punjab, Pakistan. Nat Hazards 95, 845–861 (2019). https://doi.org/10.1007/s11069-018-3523-5

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