Farmer’s Perceptions on Market and Climate Risks: Adaptive Behavior in Punjab, Pakistan

Abstract

Purpose: Rural communities particularly in developing countries are consecutively facing losses of income and crops production due to dynamics of the market and climatic risks. The specific objective of this research is to investigate farmers’ perceptions of market and climate risks and their adaptive behavior in Punjab, Pakistan. Methodology: A multistage random sampling approach was used for collecting the data of 480 household respondents from climate-based categorized three districts of Punjab, Pakistan. Findings: For empirical correlation of risk perception of farmers with combined risks and adaptive behavior, this study used two Logit models. Estimates indicated as risk perception of the farmers market and climate change significantly affected their adoption behavior such as fall in agriculture products prices and drought while an increase in floods, rainfall and hail storms. Logit model explanatory capacity was improved by including demographic factors in the model. Large farms household heads were unwilling whereas well-educated and male farmers were more enthusiastic to take measures for avoidance of risks. In averting the climate risks, the majority of farmers adopted scheduled adjustment and crop varieties as adaptive measures in the study area. Policy Implications: For motivating farmers to adapt and risk management measures there is a need for adequate provision of financial support through formal institutions on the subsidized rate of interest in these study areas.

Keywords

• Adaptation
• Behavioral economics
• Adaptive behavior
• Climate change
• Risk perception