Economic assessment of risks associated with different rice-based cropping patterns in Ilocos Norte, Philippines

The study assessed the economic risks with the different rice-based cropping patterns in Ilocos Norte, Philippines. Farmers' risk perceptions were determined using Likert scale statement while risk preferences were elicited using the experimental method. A MOTAD risk programming model was used to determine the risk-efficient rice-based cropping patterns in the province. Four-year panel data from 100 farmers practicing rice-corn, rice-garlic, rice mungbean, rice-sweet pepper and rice-tomato cropping patterns were used in the model. Results showed that in general, resource-endowed and resource-poor farmers had the same risk perceptions on farming. They perceived that the price of fertilizer, occurrence of typhoon and heavy rainfall were the mostly likely sources of risk. However, both the resource-endowed and resource-poor farmers differ in ranking their risk perceptions for the production of corn, mungbean and sweet pepper. Farm size and wealth are the variables affecting the farmers' risk perceptions. The farmers were found to be generally risk averse. There was no significant evidence showing the effect of farmers risk aversion to the profitability of cropping patterns. Wealth, age, and availability of credit affected the farmers' risk preferences but not across all cropping patterns. The most profitable cropping pattern was rice-sweet pepper followed by rice-tomato. Risk affected the profitability of rice-tomato cropping pattern among resource-endowed farmers. Economic factors mostly affected the profitability of the cropping patterns. Particularly significant was the output price. The cropping practices of the farmers in Ilocos Norte were not necessarily risk-efficient. Based on the MOTAD analysis, the risk-efficient cropping patterns included rice, rice-mungbean and rice-tomato. The resource-poor farmers had more diversified crops compared to the resource-endowed farmers when conditions were unfavorable. The farmers increased their land allocation to rice to ensure food security and self-sufficiency especially when conditions were unfavorable. A policy environment that makes output and input prices favorable for farmers to ensure a high level of income is warranted. Policies to promote farmer education can help minimize the production and environmental risks. Environmental safeguards are needed to ensure sustainable rice-based cropping systems in Ilocos Norte.