Risk and risk management strategies of smallholder onion farmers in Sokoto state, Nigeria

Oyeyode Tohib Obalola,Opeyemi Eyitayo Ayinde

doi:10.14720/aas.2018.111.3.04

Oyeyode Tohib Obalola, Opeyemi Eyitayo Ayinde

Open Access

https://doi.org/10.14720/aas.2018.111.3.04

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Abstract

The study examines risk and its management strategies among smallholder onion farmers in Sokoto State. Data were collected with the use of structured questionnaire designed to pull together information on the socioeconomic characteristics of the farmers in the area such as age, level of education, experience, family size, membership of farmer association, extension contact, risk preference of the farmers etc. Data was also collected on risk sources and risk management strategies. The primary data used were obtained from structured questionnaire administered to 120 randomly selected farmers. The analytical techniques that were used in the analysis of data were descriptive statistical tools such as means and percentages, Equally Likely Certainty Equivalent with a Purely Hypothetical Risky prospect (ELCEPH) technique and the 5-point Likert scale. The result showed that majority of the farmers are risk averse having a positive Arrow-Pratt absolute risk aversion coefficient.

Highlights

Agricultural production is highly characterized by risks, which range from adverse weather, pests to diseases, which in turn lead to price uncertainty (Ayinde et al, 2008)
One of them is a situation of uncertainty, in which either all the possible outcomes of an event/action or the probabilities associated with each outcome or both are not known
The other is a situation of risk, which occurs when all possible outcomes for a given management decision and the probability associated with each possible outcome are known (Kay, 1981)

Summary

Introduction

Agricultural production is highly characterized by risks, which range from adverse weather, pests to diseases, which in turn lead to price uncertainty (Ayinde et al, 2008). For these reasons, farmers’ attitude towards risk is imperative in understanding their behavior towards the adoption of new technology and managerial decisions. A perfect knowledge occurs when the cause (action) and results are known. The other is a situation of risk, which occurs when all possible outcomes for a given management decision (action) and the probability associated with each possible outcome are known (Kay, 1981)

Methods

Results

Conclusion