Abstract
This research aims to understand the effect of risk aversion on the farmers’ willingness to pay (WTP) to mitigate on climate change and identify the relationship between climate change and agriculture sectors’ growth at Bengawan Solo Sub-Watershed in Upper Area. We use primary data obtained through interviews with 104 respondents, who are farmers from Sribit Village in Sragen Regency. The sampling techniques are purposive non-probability sampling. The data analysis using contingent valuation methods (CVM) and Multiple Linear Log Regression. Meanwhile, the secondary data obtained from The Central Bureau of Statistics (BPS), World Bank, and Germanwatch is collected to identify the effect of climate change on the agricultural sector. This research result shows that risk aversion does not affect farmers’ WTP to do adaptation. The variable of land area, education, and input cost affect significantly (5%), while working experience also affect to WTP at 10% significance level. The implication of low-risk aversion implies farmers not aware of climate change. Risk reduction efforts will not be a priority for farmers because the advantages to adaptation is not worthy. The relationship between production levels and negative climate change scores confirms that climate change can reduce farmer production.
Highlights
Climate change that causing a change in rainfall pattern, length of the rainy season, shift at the beginning of the rainy season, and increase in extreme climate incident has a serious impact on agricultural sector Surmaini, Runtunuwu, & Las (2011) increase in frequency of extreme climate events, and rise in temperatures and sea level were serious impacts of climate change faced by Indonesia
Multiple linear regression analysis aims to determine the effect of land area, input cost, experience, education, risk aversion, and climate change adaptation on willingness to pay (WTP) in Sribit village, Sidoharjo district, Sragen Regency
Based on table 3, the formula shows the relationship between education, land area, risk aversion, input cost, climate change adaptation, and experience, and willingness to pay (WTP) in the agricultural area that is vulnerable to floods
Summary
Climate change that causing a change in rainfall pattern, length of the rainy season, shift at the beginning of the rainy season, and increase in extreme climate incident (flood and drought) has a serious impact on agricultural sector Surmaini, Runtunuwu, & Las (2011) increase in frequency of extreme climate events, and rise in temperatures and sea level were serious impacts of climate change faced by Indonesia. Agriculture is most vulnerable sector to impacts of climate change. Agricultural sector contributes about 14% of total emissions, while at the national level agricultural sector contributes 12% According to Agricultural Research and Development Agency (Pertanian, 2011) the effect of climate change such as flood, causing agricultural land to experience crop failure. Increase in flood intensity will affect production indirectly due to pests and plant diseases attack increase.
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