Poverty and risk attitudes: the case of cassava farmers in Awutu-Senya district of the central region of Ghana

Abstract

Ghana’s agriculture is characterized by low productivity, low farm incomes and low levels of technological adoption and use of inefficient production techniques. This poor state of Ghana’s agriculture is related to farmers’ attitudes towards risk in the adoption of new production techniques, as well as risk in the production and socioeconomic environment. Having realized that poverty is a major constraining factor in the farmer’s production and socio-economic environment, the study therefore sought specifically to: measure the poverty situation among cassava farmers in the study area; analyze the risk attitudes of cassava farmers and determine the effect of poverty on risk attitudes of the farmers. The study area is Awutu Senya District. A random sampling technique was used for the selection of respondents. Data were generated using structured interviews and field visits. The collected data were analyzed using descriptive statistics, the Foster Greer Thorbecke poverty measures, Equal Certainty Equivalent Risk Model and regression analysis to determine the effects of poverty on the risk attitude of farmers. The result showed that 58% of farmers in the study area were poor and 31% measured the depth or extent of poverty as indicated by the FGT poverty measure. Furthermore, using the equal certainty equivalent risk model of assessing farmers’ risk attitudes the study revealed that, as many as 82% of the farmers was risk averse. The result of regression analysis also suggested that age, household size, educational level, land size and degree of poverty were significant determinants of farmers’ attitude towards risks. Poverty situation was found to be positively related farmers attitude towards risk. It is therefore, recommended that the government and private sector should initiate policy that strengthens existing programmes on alternative income generating activities within the broad framework of its poverty alleviation strategy to improve farmers’ income. With improved income farmers should be able to improve on their risk management skill to mitigate the effect of perceived risky situation they find themselves