Maize production under risk: The simultaneous adoption of off-farm income diversification and agricultural credit to manage risk

Abstract

Farmers in Pakistan continue to produce maize under various types of risks and adopt several strategies to manage those risks. This study is the first attempt to investigate the factors affecting the concurrent adoption of off-farm income diversification and agricultural credit which the farmers use to manage the risk to maize production. We apply bivariate and multinomial probit approaches to the primary data collected from four districts of Punjab Province in Pakistan. The results show that strong correlations exist between the off-farm diversification and agricultural credit which indicates that the use of one risk management strategy leads to another. The findings demonstrate that education, livestock number, maize farming experience, perceptions of biological risks and risk-averse nature of the growers significantly encourage the adoption of diversification as a risk management tool while farm size inversely affects the adoption of diversification. Similarly, in the adoption equation of credit, maize farming experience, farm size, perceptions of price and biological risks and risk attitude of farmers significantly enhance the chances of adopting agricultural credit to manage farm risks. These findings are important for the relevant stakeholders who seek to offer carefully designed risk minimizing options to the maize farmers.

Factors Influencing Rice Farmers’ Risk Attitudes and Perceptions in Bangladesh amid Environmental and Climatic Issues

“…Major demographic characteristics of the respondents such as age, family size, total income per month, experience, distance, savings, agricultural credit, and access to an extension agent have a negative coefficient with risk-aversion. The consequences are consistent with previous studies conducted by Ullah et al [43] and Akter et al [36]. These findings are relevant to the Bangladesh context because farming represents a family business for many farmers who are choosing to continue their family concern for many years while assuming risk.…”

“…In the final stage, we randomly selected farm households from the list provided by the Upazilla Council Office. We surveyed 50 rice growers from each village and used the following equation developed by Yamane [35] and also used by others [36,37] (Eq. 1):…”

Dairy Production under Climatic Risks: Perception, Perceived Impacts and Adaptations in Punjab, Pakistan

“…Most of the farmers, about 75%, earn an income from selling their labor to non-agricultural activities in cities, in this way they spread the risk and also enables them to invest in their farm in the near future. They diversified their income by working as daily laborer, petty traders, and construction worker or in some industry as wage earner, so income from these activities enables farmers to modernize their production system during unexpected hazards [59,60,61]. Heat waves, pests and diseases, droughts and floods are the major risks which cause the increase of infectious disease and parasite occurrence in cattle.…”

Determinants of Livelihood Diversification Under Environmental Change in Coastal Community of Bangladesh

“…These diversified activities allow farming households to manage risk and improve their lives (Aniah et al, 2019; Baird & Hartter, 2017). There are several factors, such as education level, number of livestock, farming experience, etc., that affect the adoption of diversified activities (Akhtar et al, 2019). Most importantly, the age of the household head, along with possession of cropland and distance from markets, are essential determinants of LD strategy (Corral & Radchenko, 2017; Ismail et al, 2018; Tesfaye et al, 2011).…”