Quarterly Journal of International Agriculture No. 3/06
Understanding the perceived importance of risk for coffee growers: empirical evidence from Ethiopia
Degnet Abebaw
Jimma University, Ethiopia
Karin Holm-Müller
University of Bonn, Germany
and John Mburu
University of Bonn, Center for Development Research, Germany
Abstract
Risk perceptions play a key role in production and investment behavior
of farmers. However, insufficient attention has been given to
understand its nature and distribution in cash crop farming such as
coffee. This study, therefore, attempts to explore patterns of coffee
farmers’ perceived sources of risk and the factors associated with
them. Data were drawn from a representative sample of 195 farmers
residing in southwest Ethiopia. Farmers’ perceptions of risk are uneven
and include price or market risks, crop diseases and pests, human
illness, financial and natural elements. Farmers’ perceptions of the
sources of risk can partly be explained by a combination of family and
farm characteristics, location attributes, human capital, access to
information and other infrastructure. In all, the results imply that
farm advisors and policy makers can use these characteristics in
targeting households and farmers’ groups for communicating relevant
information about risk in coffee farming.
Keywords: risk perceptions, coffee farming, factor analysis, multiple regressions, Ethiopia
JEL: Q12
Vol. 45 (2006), No. 3: 253-267