Factors influencing hybrid maize farmers' risk attitudes and their perceptions in Punjab Province, Pakistan

Hybrid maize farmers have to face diverse kinds of climate, biological, price and financial risks. Farmers' risk perceptions and risk attitudes are essential elements influencing farm operations and management decisions. However, this important issue has been overlooked in the contemporary studies and therefore there is a dearth of literature on this important issue. The present research is therefore, an attempt to fill this gap. This study aims to quantify hybrid maize farmers' perceptions of disastrous risks, their attitudes towards risk and to explore the impacts of various farm and farm household factors on farmers' risk attitudes and risk perceptions. The present study is conducted in four hybrid maize growing districts of Punjab Province, Pakistan, using cross-sectional data of 400 hybrid maize farmers. Risk matrix and equally likely certainty equivalent (ELCE) method are used to rank farmers' perceptions of four catastrophic risk sources including climate, biological, price and financial risks and to investigate farmers' risk aversion attitudes, respectively. Furthermore, probit regression is used to analyze the determinants affecting farmers' risk attitudes and risk perceptions. The results of the study showed that majority of farmers are risk averse in nature and perceive price, biological and climate to be potential sources of risks to their farm enterprise. In addition, analysis divulges that distance from farm to main market, off-farm income, location dummies for Sahiwal and Okara, age, maize farming experience, access to extension agent, significantly (either negatively or positively) influence farmers' risk attitudes and risk perceptions. The study delivers valuable insights for farmers, agricultural insurance sector, extension services researchers and agricultural policy makers about the local understanding of risks to hybrid maize crop in developing countries, like Pakistan, and have implications for research on farmers' adaptation to exposed risks.