TY - JOUR

T1 - Does risk preference influence farm level adaptation strategies?

T2 - Survey evidence from Denmark

AU - Nainggolan, Doan

AU - Moeis, Faizal Rahmanto

AU - Termansen, Mette

N1 - Publisher Copyright: © 2023, The Author(s).

PY - 2023

Y1 - 2023

N2 - Farmers’ decisions to adopt new technology or measures for agricultural production processes are crucial for adapting to climate change. Meanwhile, risk preference has received great attention over the years in agriculture-related studies as it has been identified as a strong driver for agricultural production decisions. However, empirical studies on the relationship between farmers' risk preferences and adaptation choices in response to climate change remain scant. The present study, utilizing data from a farmer survey in Denmark, aims to examine farmer risk attitude and determine to what extent it influences crop choice decisions, such as crop changes, as an important part of farm level adaptation strategies. Applying a logit regression method, our study finds that: (1) the majority of farmers in the survey were identified as risk tolerant; (2) several demographic and socio-economic factors, such as work experience and farmland tenure were significantly related with farmer risk preference; (3) actual adoption of the majority of farm level adaptation strategies through crop changes and management was found to be significantly less likely for risk averse farmers compared to risk tolerant farmers. Therefore, policy development to promote successful adaptation measures in the agricultural sector should take into account farmers' risk preferences. To this end, risk averse farmers may need better targeting strategies. Future studies could further investigate the role of farmers' risk preferences on the adoption of a wider range of climate change adaptation and mitigation measures and technologies.

AB - Farmers’ decisions to adopt new technology or measures for agricultural production processes are crucial for adapting to climate change. Meanwhile, risk preference has received great attention over the years in agriculture-related studies as it has been identified as a strong driver for agricultural production decisions. However, empirical studies on the relationship between farmers' risk preferences and adaptation choices in response to climate change remain scant. The present study, utilizing data from a farmer survey in Denmark, aims to examine farmer risk attitude and determine to what extent it influences crop choice decisions, such as crop changes, as an important part of farm level adaptation strategies. Applying a logit regression method, our study finds that: (1) the majority of farmers in the survey were identified as risk tolerant; (2) several demographic and socio-economic factors, such as work experience and farmland tenure were significantly related with farmer risk preference; (3) actual adoption of the majority of farm level adaptation strategies through crop changes and management was found to be significantly less likely for risk averse farmers compared to risk tolerant farmers. Therefore, policy development to promote successful adaptation measures in the agricultural sector should take into account farmers' risk preferences. To this end, risk averse farmers may need better targeting strategies. Future studies could further investigate the role of farmers' risk preferences on the adoption of a wider range of climate change adaptation and mitigation measures and technologies.

KW - adaptation

KW - agriculture

KW - behaviour

KW - climate change

KW - crop choice

KW - crop management

KW - farmer

KW - risk preference

U2 - 10.1007/s11027-023-10077-2

DO - 10.1007/s11027-023-10077-2

M3 - Journal article

AN - SCOPUS:85169686819

VL - 28

JO - Mitigation and Adaptation Strategies for Global Change

JF - Mitigation and Adaptation Strategies for Global Change

SN - 1381-2386

M1 - 40

ER -