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University of Fort Hare (2014)

Risk preferences of smallholder irrigation farmers in the former Ciskei homelands of the Eastern Cape Province, South Africa

Itumeleng, Mathlo

Titre : Risk preferences of smallholder irrigation farmers in the former Ciskei homelands of the Eastern Cape Province, South Africa

Auteur : Itumeleng, Mathlo

Université de soutenance : University of Fort Hare

Grade : Master of Science in Agricultural Economics 2014

Résumé
Although several studies have investigated on commercial farmers’ risk preferences, there is still lack of information on the risk attitudes and risk preferences of smallholder farmers in South Africa. Risks associated with the adoption of new agricultural technology need to be explored in order to address the transition from homestead food gardening to smallholder irrigated farming. This study seeks to understand risk perception of smallholder irrigation farmers by linking constraints to commercialisation, adoption of new agricultural technologies and risk preferences of smallholder farmers in the former Ciskei Homelands of the Eastern Cape. A total of 101 respondents were surveyed, consisting of 38 smallholder farmers and 63 homestead food gardeners in the Eastern Cape. Questionnaires were used to record household activities, socio-economic and institutional data as well as household demographics through personal interviews. The probit results indicated that older farmers are less risk averse thus more willing to take risk. The risk analysis indicates that farmers who are employed elsewhere are more willing to take risk as income is playing a major role in risk preferences. The results also prove that factors such as tenure system and years in farming have a major influence on farmers’ decision to take risk and adopt new agricultural technology. According to the multi-logit model the major factors influencing technology adoption and risk taking are household size, water rate and type of irrigation system used by the farmers. This study provides useful practical insights for policy makers, farm advisers and researchers in the design of effective and efficient policies, programmes and projects which can affect the adoption of technology, increase smallholder farmers capacity to manage risk and drive growth in the food market.

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