Catastrophic risk perceptions and the analysis of risk attitudes of Maize farming in Bangladesh

Abstract

Risk perceptions and attitudes play a crucial role in agriculture. However, few researches on risk management have been conducted in developing countries. Therefore, keeping view on this knowledge gap, this research made an attempt to measure farmers' perceptions of catastrophic risks, their risk attitude and to assess the influence of farm and farm household features by using probit model, Equally Likely Certainty Equivalent approach and risk matrix. The data were collected through a stratified random sampling method where 350 maize farmers were interviewed from four different agro-ecological districts in Bangladesh. The results showed that most farmers had a risk averse attitude, and floods, heavy rains, pests, and diseases posed potential threats to maize production in the study area. Age, educational status, income, and land ownership were the key determinants for risk attitude while social and farm features play an insignificant role for the farmer's risk perceptions. The vibrant interpretations may further improve understanding of the risk management decisions and will help policymaker to better anticipate which farmer will adopt government support tool in the presence of traditional risk management tools. Also, the extension authority can improve their programs to guide the farmer in a better way to improve the risk management situation.

Keywords

• Risk management strategy
• Probit model
• Catastrophic risk
• Risk attitude
• Risk perceptions
• Bangladesh