Factor Affecting of Farmer Willingness to Managing Catastrophic Risks by Simultaneous Adoption of Custom Risk Management Tools (Diversification and Precautionary Savings)

Document Type : Research Paper

Authors

1 Associate Professor, Department of Agricultural Economics, Faculty of Agricultural Engineering, Sari Agricultural Sciences and Natural Resources University, Sari, Iran

2 Ph.D. Student, Department of Agricultural Economics, Faculty of Agricultural Engineering, Sari Agricultural Sciences and Natural Resources University, Sari, Iran

3 Ph.D. Student, Department of Agricultural Economics, Faculty of Agriculture, University of Zabol, Zabol, Iran

4 MSc. Student, Department of Agricultural Economics, Faculty of Agricultural Engineering, Sari Agricultural Sciences and Natural Resources University, Sari, Iran

Abstract

The use of multiple risk management tools at the same time is a common practice among the farming communities around the world. Therefore, this study is designed to investigate the Factor affecting of Simultaneous adoption of managing custom catastrophic risks tools such as diversification and precautionary savings in agriculture in Khorram Abad Area of Tonekabon. So bivariate probit model was used to cope the possible correlation between the risk management adoption decisions. The results highlighted that, age, education of the household head, family size, in farm income, land size and risk aversion coefficient has the significant effect on the decisions to adopt diversification and precautionary savings to manage farm risks. Risk aversion coefficient has the most effects on decisions to adopt managing catastrophic risks tools; Increasing in risk aversion coefficient, was increased the probability of simultaneously use of risks management tools by 0.22 percentage. Therefore, due to the positive impact of education and income on the use of risk management tools, increasing farmers 'awareness and increasing farmers' income through modifying their cropping pattern has been suggested.

Keywords

References

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Iranian Journal of Agricultural Economics and Development Research
Volume 53, Issue 3
January 2022
Pages 825-839

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