Risk Attitude of Farmers in the Climate Extreme Region of Andhra Pradesh, India

Aim: The objective of the current study was to assess the risk attitude of both insured and non-insured farmers and identify the factors influencing the risk attitude of insured and non-insured farmers.

Study Area and Design: An ex-post-facto study was conducted, and the stratified random sampling method was used to collect the data at selected villages in Prakasam district, Andhra Pradesh.

Methodology: A sample of 150 farmers of chilli and cotton was collected (90 insured and 60 non-insured). Data regarding the agriculture year 2021-22 was analysed using Moscardi and de Janvry approach. The socioeconomic, institutional and farm characteristics were analysed by using discriminant analysis to identify the factors influencing farmers’ risk attitudes.

Results: The present study results showed that the majority of the farmers are risk neutral. In the case of risk preferers insured farmers are more compared to non-insured farmers. Insured chilli farmers more than non-insured chilli farmers in case of risk-averse but, it is the reverse in the case of cotton farmers. Occupation, constraints in getting credit facility, membership of the association, the proportion of crop income to the total farm income and family size of insured chilli farmers and family size, education level membership of the association, constraints in getting credit facility, the proportion of crop income to total farm income of non-insured chilli farmers are significant. Variables like age, occupation, farming experience, constraints in getting credit facility and age, occupation, education level, and farming experience of insured and non-insured cotton farmers were found to be significant.