Investigating the Sources of Risk in Agricultural Production (The Case of Citrus Production in Fars Province)

Risk is an important and effective factor in farmer's decision making process and one of the most important factors in determining the diffusion rate of new technologies among farmers. So, recognizing the sources of farmer’s risk and factors affecting them may be a proper guide in selecting and applying the prospective technologies in agriculture. In this study, farmer’s risk perception from various sources was studied for a sample of citrus producers from Jahrom region. To investigate the factors affecting farmer’s risk perception, an ordered probit model was estimated using maximum likelihood estimation (MLE) method. The results indicated that access to water and also crop freezing are the most important sources of farmer’s risk. The results also showed that, acreage, investment credit and participation in the extension course have a negative effect on access water as a source of risk. On the other hand, adoptions of crop freezing insurance, receiving investment credit, and participation in extension course have a negative effect on freezing as the other source of risk. The negative signs of these sources of risk shows that increase in above variables will decrease the probability of access to water and crop freezing as sources of farmer’s risk. According to the results, it is suggested that government play a key role in extenuation education and over facilities such as paying credit to farmer. On the other hand, since acreage has a negative effect on dependent variables, therefore, consolidation of farms will decrease this kind of risk.