Risk perceptions and management strategies by smallholder farmers in KwaZulu-Natal Province, South Africa

Maggie Kisaka-Lwayo and Ajuruchukwu Obi

International Journal of Agricultural Management, 2012, vol. 01, issue 3, 12

Abstract: Risk is a central issue in rural areas that affects many different aspects of people’s livelihoods in the developing world. Unless well managed, risks in agriculture can slow development and hinder poverty reduction. Farmers’ perceptions of and responses to risk are therefore important in understanding their risk behaviour. This paper examines risk perceptions and management strategies using field data collected from 200 smallholder rural farmers. The relationships between various socioeconomic characteristics and perceived sources of risk were also examined. In general, price, production and financial risks were perceived as the most important sources of risk. Using Principal Components Analysis, seven principal components (PCs) that explained 66.13% of the variation were extracted. Socio economic factors identified to have a significant relationship with the various sources of risk are age, gender, education, location, information access and risk-taking ability. The most important traditional risk management strategies used by the surveyed farmers were identified as crop diversification, precautionary savings and participating in social networks. The result of this study provides useful insights for policy makers, advisers, developers and sellers of risk management instruments.

Keywords: Risk; and; Uncertainty (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
https://ageconsearch.umn.edu/record/149748/files/28-Kisaka.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:ijameu:149748

DOI: 10.22004/ag.econ.149748

Access Statistics for this article

More articles in International Journal of Agricultural Management from Institute of Agricultural Management Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().