Risk experience and smallholder farmers’ climate change adaptation decision
2020
Habtemariam, Lemlem Teklegiorgis | Gandorfer, Markus | Kassa, Getachew Abate | Sieber, Stefan
Farm level adaptation can offset some of the negative impacts of climate change on agriculture. Thus, it is vital to understand the process of farmers’ adaptation decisions when informing policy interventions. It is hypothesized that farmers’ decisions to take actions against climate change are related to risk experience as well as a range of socio-economic variables. Although evidence indicates that socio-economic variables are relevant, the empirical evidence on the role of risk experience on adaptation decisions is limited. The present study assesses whether perceived risk experience in terms of agricultural production shocks and yield reduction influence farmers’ decisions to adapt. Data collected from smallholder farmers in Ethiopia is used for this purpose. The study applies a multivariate endogenous probit model and controls for potential endogeneity of perceived risk experiences to adaptation decision. The results indicate that farmers who perceive having experienced production shocks are more likely to decide to adapt. However, experiencing simply yield reduction is not associated with adaptation decision. Other socio-economic, institutional, and agro-ecological variables are also found to be associated with adaptation decisions. It is concluded that the role of risk experience on farmers’ decision to adapt is a function of the severity of the experienced risk.
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