Smallholder farmers risk management strategies and livelihood implications: Evidence from nsukka local government area, enugu state, Nigeria

Abstract


Amarachi Jacinta Agu* and Ume Chukwuma Otum

This study was designed to assess the risk management strategies used by smallholder farmers in Nsukka local government area. The broad objective of this study was to assess the risk management strategies used by peasant farmers and how these can be improved upon. The specific objectives were to: (i) identify and describe risks faced by peasant farmers and its impacts on their production, (ii) identify and describe the risk management strategies employed, and (iii) examine the factors affecting risk averseness among pesant farmers. A multi stage random sampling technique was used to select 100 famers. Primary data was used and were collected using well-structured questionnaire and personal interview method. The data was analyzed using descriptive statistics like mean, frequencies, Likert rating scales and Probit regression. The results showed that risk from deficiency in rainfall, excess rainfall, heat, pest and diseases, unexpected variability of yields, unexpected variability of product prices, unexpected variability in input prices, changes political and economic situation, fire and drought imposed serious threats to the respondents’ farming operations and these risky situations had caused low farm income, increased input prices, increased need to borrow, decreased savings, migration to cities and low farm yield. The factors identified to have significant effect on their perception regarding taking risk in agriculture were gender, age, farming experience, extra skill, farm income and off farm income. The risk managements strategies adopted were having diversified crop, animal or other enterprise, storing feed and seed reserves, planting several varieties of crops, applying pests and diseases control program, having a water reservoir, planting and rearing disease resistant varieties of crops and animal, planting and rearing improved varieties of crops and animal, spreading sale over several time and period, obtaining market information on prices forecast and trends, reduced debt level, leasing farm machinery rather than owning them, working off farm to supplement net farm income and investing in nonfarm investment businesses in other to reduce the risky situations. The study therefore recommends that government should provide effective and well-functioning credit schemes and facilities and agricultural banks basically for agricultural projects so that farmers can easily get the necessary and timely financial support they need to boost and expand productivity.

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