The entrepreneurial risk factors that affect decision-making and income generation in urban agriculture for households: A case of farmers in Pietermaritzburg, KwaZulu-Natal

S.z Ndwalane, J.M. Thamaga-Chitja and T.O. Ojo

No 364834, 2023 Seventh AAAE/60th AEASA Conference, September 18-21, 2023, Durban, South Africa from African Association of Agricultural Economists (AAAE)

Abstract: Urban Agriculture (UA) play an essential role urban society which are faced with numerous risk/uncertainties. The risk factors include production, market, human, financial and institutional risks, all of which can have an impact on their ‘entrepreneurial spirit’ and the willingness to undertake risk. Research studies over the years have addressed risk factors that affect commercial and smallholder farmers in rural areas; however, there is limited research which considered the entrepreneurial risk factors in UA, the impact decision-making and income generation. The aim of the study is to evaluate the impact of entrepreneurial risk on decisions of urban farmers and the effects on income generation. Data was collected from randomly sampled 78 participants through a structured questionnaire. A principal component analysis (PCA) was employed to evaluate the risk factors and a logit regression analysis model was used to estimate the effects of entrepreneurial risk in UA. The results found that farmers had several constraints which affect their attitudes in UA. The results further found that factors like age, education, water quality, entrepreneurial risk factors like (production risk, market price risk) and psychological capital, were statistically significant in influencing participation of HH in UA. Thus, having the potential to influence the risk perception and subsequently increase urban agriculture participation ultimately leading to increased incomes. The study concluded that farmers were lacking motive which influenced their income generating capacity. Government budgets toward UA can also entice youth involvement in the sector, which may ultimately lead to a reduction of youth unemployment and improve food security at an individual and household level.

Keywords: Consumer/Household; Economics (search for similar items in EconPapers)
Pages: 24
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaae23:364834

DOI: 10.22004/ag.econ.364834

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