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What Determines the Uptake of Multiple Tools to Mitigate Agricultural Risks among Hybrid Maize Growers in Pakistan? Findings from Field-Level Data

Author

Listed:
  • Shoaib Akhtar

    (Centre of Excellence for Olive Research and Training (CEFORT), Barani Agricultural Research Institute, Chakwal 48800, Pakistan)

  • Azhar Abbas

    (Institute of Agricultural and Resource Economics, University of Agriculture, Faisalabad 38040, Pakistan)

  • Muhammad Amjed Iqbal

    (Institute of Agricultural and Resource Economics, University of Agriculture, Faisalabad 38040, Pakistan)

  • Muhammad Rizwan

    (School of Economics and Management, Yangtze University, Jingzhou 434023, China)

  • Abdus Samie

    (Institute of Agricultural and Resource Economics, University of Agriculture, Faisalabad 38040, Pakistan)

  • Muhammad Faisal

    (College of Economics and Management, Huazhong Agricultural University, Wuhan 430070, China)

  • Jam Ghulam Murtaza Sahito

    (Department of Agricultural Economics, Sindh Agricultural University, Tandojam 70060, Pakistan)

Abstract

Arable farming is an intrinsically risky enterprise. Therefore, managing risks and uncertainties in agriculture is very important as it affects all sectors of the economy of a developing country like Pakistan. To do so, a whole suite of options is available to the farming community to safeguard against any type of risk. However, farmers’ behavior of the concurrent adoption of multiple risk management tools is largely ignored in previous studies and has formed the rationale for this research. Thus, the current study is intended to investigate farmers’ decisions of adopting risk management strategies (contract farming, off-farm income diversification, and farm credit use) and to examine the impacts of a variety of factors on farmers’ risk management decisions. The present study is carried out in four districts of Punjab province, Pakistan with a focus on hybrid maize growers. A multivariate probit model is used to evaluate the impacts of independent variables on growers’ choices of adopting contract farming, off-farm income diversification, and farm credit use to manage farm risks keeping in view the potential for the concurrent adoption of these risk management strategies. Results show that 78% of farmers are risk-averse and hence ready to manage risks. The top risk faced by farmers is price risk followed by biological, climatic, and financial risks. Contract farming is the most popular strategy (61% farmers) followed by off-farm income diversification (49% farmers), and the use of farm credit (42% farmers). The findings also reveal that the decisions of adopting risk management strategies are interlinked while the adoption of one risk management tool complements farmers’ decision to adopt other risk management strategies. In addition, the risk management strategies’ adoption choices are affected by the number of factors including socioeconomic characteristics, farmers’ risk perceptions about risk sources, and their attitude towards risk. The study recommends the provision of timely information (climatic, extension) along with easy access to farm credit and the streamlining of contractual arrangements.

Suggested Citation

  • Shoaib Akhtar & Azhar Abbas & Muhammad Amjed Iqbal & Muhammad Rizwan & Abdus Samie & Muhammad Faisal & Jam Ghulam Murtaza Sahito, 2021. "What Determines the Uptake of Multiple Tools to Mitigate Agricultural Risks among Hybrid Maize Growers in Pakistan? Findings from Field-Level Data," Agriculture, MDPI, vol. 11(7), pages 1-13, June.
    • Handle: RePEc:gam:jagris:v:11:y:2021:i:7:p:578-:d:581037
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    References listed on IDEAS

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    Cited by:

    1. Shoaib Akhtar & Muhammad Ashraf Sumrah & Muhammad Faisal & Muhamad Jan & Muahmmad Ramzan Anser & Muhammad Azhar Iqbal & Hasnain Nawaz & Muhammad Rafique, 2021. "Economics and Marketing of Olive in Punjab, Pakistan," Journal of Economic Impact, Science Impact Publishers, vol. 3(3), pages 202-208.
    2. Muhammad Amjed Iqbal & Muhammad Rizwan & Azhar Abbas & Muhammad Sohail Amjad Makhdum & Rakhshanda Kousar & Muhammad Nazam & Abdus Samie & Nasir Nadeem, 2021. "A Quest for Livelihood Sustainability? Patterns, Motives and Determinants of Non-Farm Income Diversification among Agricultural Households in Punjab, Pakistan," Sustainability, MDPI, vol. 13(16), pages 1-14, August.
    3. Shoaib Akhtar & Azhar Abbas & Muhammad Faisal & Muhammad Haseeb Raza & Abdus Samie & Mark Yu & Ashley Lovell, 2023. "Roles of Personal, Household, Physical, and Institutional Factors on Farmers’ Efficiency of Hybrid Maize Production: Implications for Food Security," Agriculture, MDPI, vol. 13(9), pages 1-13, September.
    4. Jamal Shah & Majed Alharthi, 2022. "The Association between Farmers’ Psychological Factors and Their Choice to Adopt Risk Management Strategies: The Case of Pakistan," Agriculture, MDPI, vol. 12(3), pages 1-24, March.
    5. Muhammad Suleman & Muhammad Ashraf & Qurat-Ul-Ain Raza & Muhammad Amjad Bashir & Shafeeq Ur Rahman & Muhammad Aon & Saba Ali & Sher Muhammad Shahzad & Muhammad Usman Khalid & Hafiz Muhammad Ali Raza &, 2022. "Determining the Cadmium Accumulation in Maize ( Zea mays L.) and Soil Influenced by Phosphoric Fertilizers in Two Different Textured Soils," Land, MDPI, vol. 11(8), pages 1-15, August.

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