Abstract
Farmers, as the first link in the agri-food value chain, are key in assuring its sustainability. Farmers’ behavior and attitudes towards implementing sustainable farm practices is influenced by their perceptions of risk affecting the farm and their household, either directly or indirectly. In this study, we elicit farmers’ perceived risk perception and preferences and test their robustness and validity using a sample of Greek smallholder farmers since they represent the majority of Greek holdings. Results suggest that farmers exhibit risk aversion in most situations of farm-level decision making. In many situations, farmers will prefer on-farm environmental sustainability strategies over other risk mitigation strategies. More specifically, higher age, higher education, farm size, proportion of rented land, and the existence of a farm succession plan reveal an increase in farmers’ preference for on-farm environmentally sustainable strategies and suggest reduced incentives towards implementing other on-farm or off-farm solutions.
Highlights
Farmers, as the first, and as many would argue, most crucial link of the agri-food value chain are key in achieving sustainability of the entire value chain
We investigate a number of risk attitude elicitation methods and risk management strategies that can be employed by farmers, which are classified as on-farm economic sustainability strategies, on-farm environmental sustainability strategies, and off-farm economic sustainability strategies [10]
The results showed that 26 farmers have on average mostly off-farm economic sustainability risk management strategies, 23 farmers have on average mostly on-farm economic sustainability risk management strategies and the greatest fraction, 33 farmers, have on average mostly on-farm environmental sustainability risk management strategies, confirming findings from Meraner and Finger [11]
Summary
As the first, and as many would argue, most crucial link of the agri-food value chain are key in achieving sustainability of the entire value chain. Sustainable practices, are hard to maintain when faced with risk. Farming is an activity that involves daily decision-making in the face of risks [1]. Risks may be related to external factors, such as the economic and physical environment in which the farmer operates or to internal factors such as agricultural production and the financial operation of the farm. The strategies farmers employ to mitigate risks depend on their risk perception and attitudes. The adoption of sustainable farm practices depends on farmers’ perceptions of economic, environmental, and social risks, and their reaction to them
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