A Global Review of Farmers’ Perceptions of Agricultural Risks and Risk Management Strategies

Abstract

Farmers around the world face and manage a wide range of enterprise-related risks. These risks are increasing due to a range of factors including globalisation, increased trade in agricultural products, and climate change, jeopardising agricultural enterprises and forcing farmers to adjust their production and management strategies. Here we present results of a systematic literature review, following PRISMA protocol, of farmers’ perceptions of, and responses to, agricultural risks. Using data reduction method (factor analysis) and descriptive statistics, we analysed 197 studies and found that weather-related risk (55%), biosecurity threats (48%), and human risk (35%) are the significant risks perceived by farmers for their agricultural enterprises. Diversification of crop and animal production (28%) and pests and diseases monitoring and prevention (20%) were the preferred agricultural risk management strategies employed by farmers. Few studies have investigated socio-economic factors that explain risk perceptions (18%) or factors that influence how farmers manage agricultural risks (11%). The main barriers to successfully managing agricultural risks were limited access to information and formal low-interest loan systems, especially in developing countries. We identified a mismatch between perceived risk sources and risk management strategies, highlighting a need to improve understanding of why particular management responses are employed to address the various risks. This review suggests areas for future research to improve understanding of the perceptions of risks held by farmers, and to support efforts to manage and reduce these risks.

Risk management strategies adopted by small-scale vegetable farmers in Thaba Chweu Local Municipality, Mpumalanga Province in South Africa

“…Lastly, 13% of farmers in TCLM are non-adopters. In agreement with these results, Duong et al (2019) recently argue that the farmers' management response to risks is influenced by their perceptions of the risk concerned on a case-by-case basis. This is because the farmers develop a wide range of strategies to limit the impacts of agricultural risks, thus employing strategies spanning from informal mechanisms at the farm level (crop and animal diversification and advanced technology applications) to formal mechanisms such as insurance and contracting (Meuwissen et al, 2001;World Bank, 2005;Bergfjord, 2009).…”

“…In relation to the results observed, previous research points out that farmers are not likely to adopt new technologies. However, they adopt innovative risk management practices in order to control and manage risk (particularly in agricultural production) for sustainability and efficiency (Awan et al, 2015;Duong et al, 2019). Hence, there is an observed higher statistic of farmers who adopt risk management strategies in the study area.…”

“…Knutson et al (2011) andWoods et al (2017) also shared similar findings, establishing that a farmer's level of adoption of risk management strategies and successful risk management is affected by certain factors which include the absence of transparent information, limited institutional support and lack of capital. To this point, given the study results, and a proposition by Duong et al (2019), improved institutional support for risk management is therefore essential so as to understand the farmers' risk perceptions, the socioeconomic factors that influence risk perceptions and the likely response to risks, and the barriers to implementing risk management strategies (Lewerin et al, 2015). Figure 2 indicates the number of farmers who adopt risk management strategies and those who do not use any risk management strategy.…”

“…Hence, there is an observed higher statistic of farmers who adopt risk management strategies in the study area. In this context, the lack of institutional support from the government is currently identified as a major barrier to managing agricultural risks for farmers in both developing and developed countries (Duong et al, 2019). This has resulted in farmers becoming vulnerable to agricultural risks (especially when it comes to small-scale farmers) and having difficulties in adopting new technologies of risk management due to inadequate technical knowledge, lack of funds and limitations of their production technology (Atreya, 2007;Awan et al, 2015).…”

Agriculture Risk Management: A Case Study on Rock Melon Farm in Sepang, Selangor, Malaysia

“…In a study on hybrid maize farmers' in Pakistan, finds agriculture risks are mainly due to the variability of climate, the density of biological disease, production seasonality, the different geographical production areas and consumer of agricultural production (Akhtar et al, 2018). investigates global farmer's perceptions of agricultural risks (Duong et al, 2019). The study finds weather-related risk, biosecurity threats and human risks are significant risks perceived by farmers.…”