Cattle farmers’ perceptions of risk and risk management strategies

Bishu, Kinfe and O'Reilly, Seamus and Lahiff, Edward and Steiner, Bodo (2016): Cattle farmers’ perceptions of risk and risk management strategies. Forthcoming in: Journal of Risk Research

Abstract

This study analyzes cattle farmers’ perceptions of risk and risk management strategies in Tigray, Northern Ethiopia. We use survey data from a sample of 356 farmers based on multistage random sampling. Factor analysis is employed to classify scores of risk and management strategies, and multiple regression is then used to investigate the relationship of scores and farmers’ characteristics. The results demonstrate that shortage of family labor, high price of fodder and limited farm income were perceived as the most important risks. Use of veterinary services, parasite control and loan utilization were perceived as the most important strategies to manage risks. Livestock disease and labor shortage were perceived as less of a risk by farmers who adopted the practice of zero grazing compared to other farmers, pointing to the potential of this practice for risk reduction. We find strong evidence that farmers engage in multiple risk management practices in order to reduce losses due to cattle morbidity and mortality. The results suggest that government strategies that aim at reducing farmers’ risk need to be tailored to specific farm and farmer characteristics. Findings from this study have potentially important policy implications for risk management strategies in developing countries.

• Item Type: MPRA Paper
• Language: English
• Keywords: risk perception, risk management, livestock farming, multivariate analysis, Ethiopia
• Subjects: C - Mathematical and Quantitative Methods > C8 - Data Collection and Data Estimation Methodology ; Computer Programs > C83 - Survey Methods ; Sampling Methods; D - Microeconomics > D1 - Household Behavior and Family Economics > D13 - Household Production and Intrahousehold Allocation; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q12 - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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