Linking livelihood assets of smallholder households to risk management strategies: an empirical study in China

Abstract

ABSTRACTMultiple types of global change processes increasingly impact rural development programs; the interplay between these processes can impact rural livelihoods in unforeseen and surprising ways. To date, most of the studies examining farmers’ risk perceptions and risk management strategies have been agriculture-focused with little attention to their livelihood system. This study introduces the framework of the sustainable livelihood approach (SLA) to examine farmers’ risk perceptions and the risk management strategies of smallholder households in rural China. Based on data collected from a sample of 540 smallholder households, we used descriptive statistics for analyzing and classifying risk sources and risk management strategies. A multinomial logistic regression model is employed to explore the role of livelihood assets in farmers’ preferred risk management strategies. The results find that farmers express higher levels of concern about educational risk, health risk and employment risk. They put more faith in internal coping strategies (e.g. ‘resort to acquaintances’ and ‘sell livestock’) rather than reduction or mitigation strategies (e.g. ‘buy insurance’, ‘employ new techniques’ and ‘diversify income sources’) to manage those risks. Further, these results differ according to the geographical and farmer characteristics. Livelihood assets are likely to affect the choice of the farmers’ preferred risk management strategies.