Factors affecting risk taking behavior of farmers: A study in Chhattisgarh

Abstract

An Indian farmer faces various types of risks in the process of agricultural production and disposal of agricultural output. The nature and magnitude of risk which agricultural producers faces varies from farmer to farmer and from region to region. The study critically evaluates the factors which affect the risk taking behavior of the farmers in Chhattisgarh state of the India. Necessary and required data were collected from the selected 200 farmers of the three agro-climatic regions of the Chhattisgarh, India by using personal interview method. The effect of exogenous variable like Age of the respondent, Education level, Gender, Experience in farming, family size, Number of earners in family, Size of operational holding, Annual total income of family, Availability of market, Distance of market from home, Sources of non-farm income, Institutional credit arrangement to an outcome variable i.e risk taker or risk averse was tested by using logit regression estimate. Result revealed that among thirteen exogenous variables, Five variables exhibited statically significant relationship with the risk taking attitude of the farmers viz. Family Size, No. of earners in family, Family income, Experience in farming and Gender of the farmer. Further taking into consideration the positive and negative contribution to the outcome variable it was found that family size exhibited negative relationship as the calculated odd ratio is less than one (0.999) implying that as the family size increases risk taking attitude decreases while No. of earners in family, Family income, Experience in Farming showed positive relationship as calculated odd ratio for these variables are greater than one (1.0) implying that increase in value of these variables, decrease the risk taking behavior of the farmers. In case of gender, the male farmer is more risk taker than female farmer.