Attitudes toward risk and coping responses: the case of food crop farmers at Agona Duakwa in Agona east district of Ghana

Abstract

Ascertaining the attitude of farmers toward risk is an important first step in understanding their behaviour and coping strategies they normally adopt to mitigate the effects of risk they constantly face within the environment they operate. This study aims at examining risk attitudes of farmers using the Equally Likely Certainty Equivalent with a Purely Hypothetical Risky prospect (ELCEPH), and analyzing coping strategies use by food crop farmers to deal with risk situations at Agona Duakwa in East District in the Central Region of Ghana. Simple random sampling technique was used to select 40 farmers from a sample frame of 100 farmers which was obtained through snow balling. Data was obtained through structured interview schedule with the selected farmers. Descriptive statistics (frequencies and percentages, means and standard deviations) were further used to analyse the data with the help of Statistical Product and Service Solution (SPSS) computer software. The study revealed that majority of food crop farmers are risk-averse. The regression result shows that access to microcredit, income status, age, education and household size are significant determinants of farmer risk attitude. Most food crop farmers use enterprise diversification, geographical diversification, and labour supply for non-farm wage to manage risk of loss in yield; however, the food crop farmers understudied neglect the use of crop insurance and some human and marketing risks coping strategies to deal with risk in their farming business.