Risk Attitudes and Financial Profitability of Tomato Farmers - A Study in Bangladesh

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Purpose: Tomato production in the world has increased tremendously within last few decades. Nevertheless, tomato farmers are facing production, market, price and financial uncertainty. Management of these risks is greatly influenced by their attitudes towards risk. So, the objective of this study is to determine the risk attitude and profitability of tomato farmers in Bangladesh.Research Method: Sixty sample respondents of tomato farmers were selected from Mymensingh district. The Safety-First principle was used to estimate risk attitude coefficient while obit regression model was utilized to estimate the factors affecting risk attitudes of tomato farmers. In addition, financial profitability was analyzed from different points of view.Findings: Most of the tomato farmers were risk averse. Results find that only 18% of farmers were risk preferring while 42% of farmers were risk averse. Risk preferences of farmers increase with training and education while risk preference decrease with age and experience. Training and education help to understand the importance of receiving newly introduced technology, timely application of seed, irrigation and fertilizer. Education assists to earn from diversified sources that make them risk preferred. The benefit cost ratio (BCR) of tomato farming was 2.31 indicating that tomato farming is profitable.Research Limitation: A small sample size was used for this study. Therefore, policy makers should be cautious to generalize the results to a wide context of tomato farmers in developing countries.Originality/ Value: Productivity and profitability of tomato farmers can be improved if farmers can manage different risks and uncertainty associated with production practices.