Journal of Integrative Agriculture 2018, 17(6): 1454–1462

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ScienceDirect

RESEARCH ARTICLE

Factors influencing hybrid maize farmers’ risk attitudes and their

perceptions in Punjab Province, Pakistan

Shoaib Akhtar1, LI Gu-cheng1, Raza Ullah2, Adnan Nazir1, Muhammad Amjed Iqbal2, Muhammad
Haseeb Raza1, Nadeem Iqbal3, Muhammad Faisal1

1
College of Economics & Management, Huazhong Agricultural University, Wuhan 430070, P.R.China
2
Institute of Agricultural and Resource Economics, University of Agriculture Faisalabad, Faisalabad 38000, Pakistan
3
The Management School, Lancaster University, LA1 4YX, United Kingdom

Abstract
Hybrid maize farmers have to face diverse kinds of climate, biological, price and financial risks. Farmers’ risk perceptions
and risk attitudes are essential elements influencing farm operations and management decisions. However, this important
issue has been overlooked in the contemporary studies and therefore there is a dearth of literature on this important issue.
The present research is therefore, an attempt to fill this gap. This study aims to quantify hybrid maize farmers’ perceptions
of disastrous risks, their attitudes towards risk and to explore the impacts of various farm and farm household factors on
farmers’ risk attitudes and risk perceptions. The present study is conducted in four hybrid maize growing districts of Punjab
Province, Pakistan, using cross-sectional data of 400 hybrid maize farmers. Risk matrix and equally likely certainty equivalent
(ELCE) method are used to rank farmers’ perceptions of four catastrophic risk sources including climate, biological, price
and financial risks and to investigate farmers’ risk aversion attitudes, respectively. Furthermore, probit regression is used to
analyze the determinants affecting farmers’ risk attitudes and risk perceptions. The results of the study showed that majority
of farmers are risk averse in nature and perceive price, biological and climate to be potential sources of risks to their farm
enterprise. In addition, analysis divulges that distance from farm to main market, off-farm income, location dummies for
Sahiwal and Okara, age, maize farming experience, access to extension agent, significantly (either negatively or positively)
influence farmers’ risk attitudes and risk perceptions. The study delivers valuable insights for farmers, agricultural insurance
sector, extension services researchers and agricultural policy makers about the local understanding of risks to hybrid maize
crop in developing countries, like Pakistan, and have implications for research on farmers’ adaptation to exposed risks.

Keywords: risk perceptions, risk attitude, hybrid maize, determinants, Punjab, Pakistan

1. Introduction

Received 17 July, 2017 Accepted 28 September, 2017
Correspondence LI Gu-cheng, Mobile: +86-18986231362,
E-mail: lgcabc@mail.hzau.edu.cn
© 2018 CAAS. Publishing services by Elsevier B.V. All rights
reserved.
doi: 10.1016/S2095-3119(17)61796-9
Farmers have to work in an environment intricate by different
kinds of vulnerabilities and uncertainties that are always
encouraged by natural environment, market faults and
social uncertainties (Ellis 2000; Akcaoz and Ozkan 2005).
To evade many types of risks, growers should invest in term
of time and money to develop some approaches and to
 Shoaib Akhtar et al. Journal of Integrative Agriculture 2018, 17(6): 1454–1462
take different adaptive measures. These investments have
more expectation of return, but also at the same time they
have more failure of risk (Alderman 2008). Farming risks
arise mainly due to the variability of climate, the density of
biological diseases, production seasonality, the different
geographical production area and consumer of agricultural
production (McNeil et al. 2015; Ullah et al. 2015), regular
natural catastrophes (World Bank 2011), the production
and prices unpredictability of agriculture products, imperfect
input/output markets (Musser and Patrick 2002) and the
absence of financial facilities along with partial extent and
design of risk management strategies such as credit and
insurance (Musser and Patrick 2002; Jain and Parshad
2006). Some of these categories may overlap each other.
Since farming is a key source of revenue for farmers,
therefore it is imperative for agricultural households to
recognize and overcome risks (Drollette 2009). The
concern about risk in agriculture should be left not only to
the agricultural household but also to the whole society, as
the risk averse nature of farmers may result in misallocation
of resources that lessen overall welfare. Even if the farmer
is risk neutral, the presence of risk could have an impact on
production decisions due to its impact on expected marginal
productivity when randomness occurs inside the production
or cost functions (Just and Pope 1979). Understanding of
the risk sources can help farmers in taking wise decisions
related to crop management and adaptive measures. To
analyze farmers’ decision in risky and uncertain conditions,
it is necessary to observe how they perceive risk and react
in risky situations (Lucas and Pabuayon 2011).
Maize being the highest yielding cereal crop in the world
is of significant importance for countries like Pakistan, where
rapidly increasing population, food and fodder demand have
already out stripped the available food, feed and fodder
supplies. Out of total maize production, about 60% is used
in poultry feeds, 25% in industries and remaining is used
as food for human and animals. Maize accounts for 0.5%
in gross domestic product (GDP) and 2.7% in agriculture
value addition. In 2016–2017, maize was cultivated on
1 334 thousand hectares, and the production of maize was
6.130 million tonnes, showing an increase of 16.3% from the
previous year of 5.271 million tonnes (GOP 2016a). Maize
enjoys an important position in the existing cropping systems
of Pakistan. It ranks the third after wheat and rice and is
grown in almost all the provinces of the country, but Punjab
and Khyber Pakhtunkhwa are the main areas of production.
In Punjab Province, both hybrid and non-hybrid maize
varieties are being grown. The introduction of hybrid maize
varieties is mainly attributed to the efforts of private sector.
Hybrid maize varieties are very popular among the farming
communities mainly due to their higher yield potential which
generates higher returns to the growers. Like other crops,
1455
hybrid maize crop also has to face environment (excessive
rainfall, hail storm, flood, lodging of crop, drought), biological
(insect/pest diseases related to maize crop), institutional
(government support price policy negligible, lack of credit
facility, lack of insurance companies, lack of government
research institute in producing hybrid seed) and economic
issues (higher input and lower output prices, lack of market
facilities) ( Abid et al. 2015; Gorst et al 2015; Abid et al. 2016;
Iqbal et al. 2016). All these problems lead growers in a very
uncertain situation which could result in dissatisfaction and
disenchantment among growers.
Due to financial constraints and limitation of resources,
capability of Pakistan to adapt to exposed risks at national
as well as at farm level is very limited (Abid et al. 2015).
Moreover, the existence of public institutions at local level
are unable to provide support to farmers because of their
limited resources. The crop loan insurance scheme (CLIS)
was launched in Pakistan during 2008, however, the scheme
is still at an immature stage (Kassam et al. 2014; Iqbal et al.
2016) and farmers mostly rely on traditional methods to
manage farm level risks.
Assessing farmers’ perceptions and attitudes towards risk
are crucial factors shaping farmers’ decision when faced with
an uncertain situation (Akcaoz and Ozkan 2005). Decisions
made by farmers can be analyzed in risky and uncertain
situations by considering their risk perceptions and attitudes
towards risk (Lucas and Pabuayon 2011). Previous studies
on the impacts of social, economic and demographic factors
on farmers’ perceptions of risk and risk attitudes showed
mixed results. Characteristics of farms and farm household
impact risk perceptions and risk attitudes of farmers. Literacy
and agricultural experience lead farmers to understand risk
sources; their incidence and severity, and consequently effect
their perceptions and enhance their capabilities to manage
farm risk more efficiently. Earlier literature has found that
risk preferences diverge (Flaten et al. 2005) momentously
based on age (Kammar and Bhagat 2009; Kisaka-Lwayo
and Obi 2012; Ashraf and Routray 2013; Iqbal et al. 2016),
education (Khan et al 2010; Dadzie and Acquah 2012),
income (Einav et al 2010), agricultural experience (Lucas and
Pabuayon 2011), off-farm income (Ullah et al. 2015), contract
farming (Lu et al 2017) and farm size (Lucas and Pabuayon
2011; Iqbal et al. 2016). Climate information is of significant
importance in managing production risk in agriculture arising
from climate variability (Chaudhary and Aryal 2009). Farmers
access to extension workers enables understanding and
management of agricultural risks through the adoption of
effective risk management strategies (Arce 2010).
The inadequate information on farmers’ risk attitudes
and risk perceptions poses a big challenge for researchers
and policy makers to develop a comprehensive risk
management system at the farm level (Ellis 2000; Ayinde
1456 Shoaib Akhtar et al. Journal of Integrative Agriculture 2018, 17(6): 1454–1462
2008; Lucas and Pabuayon 2011). Hence, to develop an
effective policy to help farmers with risk management at
the farm level, risk information at the farm level needs to
be considered locally. Hybrid maize is becoming more
and more important food stuff in developing countries, and
it is a critical issue to analyze farmers’ risk perceptions,
policy preferences, and behaviors (Leiserowitz 2005; Deng
et al. 2017). Therefore, this research aims to explore risk
perceptions and risk attitudes of hybrid maize growers and
analyze the potential impacts of various factors on their risk
perceptions and attitudes towards risk. The findings may
provide better understanding of the farmers’ perceptions
and attitudes towards risk that ultimately shape their
decisions under risky situations. Knowing the influence of
various farm and farm household characteristics on farmers’
risk perceptions and attitudes may help policy makers to
chart out sound policies for the adaptation of farmers to
constantly changing bio-physical environment in which they
operate.
2. Data and methods
2.1. Study area
The rural areas of Punjab Province were selected for this
research. It is the second largest and most populous
province of the country, located in the semi-arid lowland
zone (Abid et al. 2015). Punjab has 20.63-million-hectare
Sampling districts
Chiniot
Faisalabad
Okara
Sahiwal
Fig. 1 Map of study districts in Punjab Province, Pakistan.
geographical area, of which 59% is cultivated. The main
criteria for selecting Punjab Province as the study area
include that: i) Punjab shares 53% of the overall agriculture
GDP and 74% for the entire cereal production of the country
(Badar et al. 2007; Abid et al. 2015); ii) 81.3% of the total
hybrid maize, and all of spring hybrid maize is produced in
Punjab province only (GOP 2016b); iii) like other crops the
hybrid maize crop in Punjab is highly exposed to various
kinds of risk, i.e., climate risk, biological risk, price risk and
financial risk (World Bank 2011).
The study was conducted in four maize producing districts
of Punjab based on their shares to total maize production in
the province following the statistics from these four districts
show some variation in climate, socioeconomic structure and
exposure to various kinds of risks (BOS 2016). Location of
the selected districts is given in Fig. 1. The annual average
minimum and maximum temperature in Punjab ranges from
16.3 to 18.2°C and 29.3 to 31.9°C, respectively, between
the period 1970–2001. Punjab receives 50 to 75% rainfall
during the monsoon (Abid et al. 2015). The pattern of
rainfall is different in different agro-ecological zones of
Punjab, rain-fed zones receive the highest quantity of rainfall
followed by irrigated zones receiving a lower quantity of
rainfall (Mohammad 2005). There are two main seasons
in Punjab, Province, i.e., Rabi (November–April) and Kharif
(May–October). Major crops cultivated in these districts
are sugarcane, maize, wheat, potato and cotton (Naqvi
and Ashfaq 2014).
 Shoaib Akhtar et al. Journal of Integrative Agriculture 2018, 17(6): 1454–1462 1457

2.2. Sampling
5 6 7 8 9 10
To full fill the study objective, a multi-stage random sampling
technique was used to select the study area and farm
4 5 6 7 8 9
household. In the first step, Punjab Province was selected

Incidence
as the main study area based on its higher contribution High
towards total agricultural GDP. In the second step, four 3 4 5 6 7 8

hybrid maize growing districts were selected at random. In

the third step from each selected districts, one village was 2 3 4 5 6 7
Low
selected using random sampling techniques. In the final
stage, farm households were selected from each village
1 2 3 4 5 6
from the list of farmers provided by the revenue department.
Specifically, 100 hybrid maize growers were selected 1 2 3 4 5
(interviewed) from each village. Yamane’s formula (Yamane Severity

1967) was used for farm household sample selection in the

study area, which is given as below:
N
n= (1)
(1+Ne2)
Where, n, sample size; N, total number of farmers in the
study area; e, margin of error, used as ±15% (0.15).
The interview schedule included all the relevant
information regarding socioeconomic characteristics of the
farm and farm household, income sources, perception of
the farmers about different risk sources for the hybrid maize
crop, and indicators to assess farmers’ risk attitudes and risk
perceptions. Prior to the start of the survey, a pretesting was
done to avoid missing any essential information.
2.3. Risk perception
Farmers were asked to score the severity and incidence of
risk source (climate, market, biological and financial risks)
on a Likert scale from 1 (very low) to 5 (very high) based on
their understanding of each risk source. Following Cooper
(2005), the given scores were then pooled in a risk matrix
and were classified as low if the score is from 2 to 5 and
higher if its range from 6 to 10. Fig. 2 shows risk matrix.
2.4. Risk attitude
An equally likely certainty equivalent (ELCE) model was
used to figure out the attitudes of farmers toward risks.
Certainty equivalents (CEs) were derived for a sequence
of risky outcomes and matched them with utility values
(Binici et al. 2003). For example, farmers were asked
to identify the monetary value of a certain outcome that
made them indifferent in a choice amid two risky outcomes
of total annual household income (PKR 80 000) and
PKR 0 each with same probabilities (in this example the
utility related with PKR 80 000 is 1 and with PKR 0 is 0).
Suppose that the reply is PKR 41 000; this is the certainty
Fig. 2 Risk matrix.
equivalent (CE) of the agriculturalists for the income level of
PKR 80 000 and PKR 0 with same probabilities. The farmer
was once more enquired to state the monetary value of
a sure outcome that make him indifferent between the
two risky outcomes of PKR 41 000 and PKR 0 with equal
probability. This process continued till appropriate data
points were found. The similar method is followed for the
other half of the income distribution to get the CE points and
match them with utility values. The farmer response of PKR
41 000 is the CE for uncertain payouts of PKR 80 000 and
PKR 0 with equal probabilities (0.5 each) and utility values
for this CE are calculated as:
u(41 000)=0.5u(0)+0.5u(80 000)=0.5(0)+0.5(1)=0.5 (2)
u is utility, in our case, is a function of wealth, but we use
it as a function of income (Olarinde et al. 2007). After finding
few certainty equivalent points and matching them with utility
values, a cubic utility function was applied for assessment
of the utility of each individual respondent. The equation of
cubic utility function is:
u(w)=α1+α2w+α3w2+α4w3 (3)
Where, α are the parameters and w represents the
wealth of the farmers and their attitudes toward risk, which
is dependent on several factors. This cubic utility function
is associated with risk aversion, risk preferring and risk
indifferent behavior (Binici et al. 2003). As utility is frequently
estimated on an ordinary scale, the shape of utility function
on an ordinary scale can be transmuted into a quantitative
measure of risk aversion called absolute risk aversion (Arrow
1964; Pratt 1964; Raskin and Cochran 1986). The absolute
risk aversion is arithmetically written as:
u´ (w)
ra(w)=– (4)
u´´ (w)
ra(w) is a parameter of absolute risk aversion, u´ and u´´
are the first and second order derivatives of wealth (w),
1458 Shoaib Akhtar et al. Journal of Integrative Agriculture 2018, 17(6): 1454–1462

respectively. Following Olarinde et al. (2007), income is
substituted for wealth. If individual is risk averse, then
coefficient of absolute risk aversion is positive, negative
if individual prefers risk and zero if individual is indifferent
to risk. The risk attitudes of farmers are included in the
study as 1, if individual reflect risk averse nature and 0,
otherwise.
2.5. Dependent and independent variables
Based on the contemporary review of relevant literature farm
household characteristics like age, education, maize farming
experience, off-farm income, contract farming, family size,
contact to extension agents and farm characteristics like
distance from main market, maize farming area are used
as independent variables as these factors can influence
farmers’ risk attitudes and risk perceptions (Ullah et al.
2015; Iqbal et al. 2016). The dependent variables used in
the study are risk attitudes and farmers’ perceptions of four
types of risks, i.e., climate risk (high rain fall, flood, storm,
lodging), biological risk (insect/pest diseases and other
hybrid maize crop related diseases), price risk (high input
prices, low output prices and market related issues) and
financial risk (non-availability of credit, high interest rate
and finance related issues).
2.6. Probit regression
By following Ullah et al. (2015) and Iqbal et al. (2016) and
keeping in view the dichotomous nature of the dependent
variables, a probit model is used in the present study which
is given as:
Yi=α+∑xiβ+ε (5)
Where, Yi is the dichotomous dependent variable, in our
study Yi shows the high-risk perceptions and risk averse
behavior. xi is a vector of independent variables used in
the analysis (such as socio-economic characteristics of the
farm and farming households), βi is the vector of unknown
parameter (to be estimated) and ε is the error term.
3. Results and discussion
3.1. Descriptive statistics
The descriptive statistics of the variables used in the analysis
are presented in Table 1. In the analysis, two types of
variables were used, i.e., continuous and discrete choice
dummy variables. Results showed that mean age of the
farmers was 45 years with 7 years of average educational
background. On average, farmers had 12 years of hybrid
maize farming experience. The average distance that
farm from the main city market was 16 km. The average
hybrid maize farm size in the selected area was 33 acres.
An average six members were included in the family size.
Analysis also indicated that 78% of the farmers show risk
averse attitude as they were not ready to take any type
of opportunity that involves any type of risk. Ellis (2000)
documented growers’ decision related to farm production

Table 1 Depiction of variables used in the model1)

Standard
Variable Description Mean
deviation
Farm and farm household characteristics
Age (years) Continuous 44.77 9.93
Education (years) Continuous 6.89 4.02
Maize farming experience (years) Continuous 12.20 5.45
Farm size (acre) Continuous 33.32 33.93
Family size (No.) Continuous 6.27 1.62
Distance from market (km) Continuous 15.83 8.78
Off-farm income Dummy takes the value 1 if off-farm income and 0, otherwise 0.49 0.50
Contract farming Dummy takes the value 1 if contract farming and 0, otherwise 0.61 0.49
Extension contact Dummy takes the value 1 if extension contact and 0, otherwise 0.77 0.42
Faisalabad Dummy takes the value 1 if district is Faisalabad and 0, otherwise 0.25 0.43
Okara Dummy takes the value 1 if l district is Okara and 0, otherwise 0.25 0.43
Sahiwal Dummy takes the value 1 if district is Sahiwal and 0, otherwise 0.25 0.43
Risk perception
Price risk Dummy takes the value 1 if price risk value above 5 and 0, otherwise 0.79 0.41
Climate risk Dummy takes the value 1 if climate risk value above 5 and 0, otherwise 0.69 0.46
Biological risk Dummy takes the value 1 if biological risk value above 5 and 0, otherwise 0.72 0.45
Financial risk Dummy takes the value 1 if financial risk value above 5 and 0, otherwise 0.61 0.49
Risk attitude
Risk aversion Dummy takes the value 1 if farmer has risk aversion behavior and 0, otherwise 0.78 0.42
1)
Authors’ calculation from own field data during September–November 2016.
 Shoaib Akhtar et al. Journal of Integrative Agriculture 2018, 17(6): 1454–1462 1459

by using income method and defined risk attitude as “a
person is described as risk averse if he chooses a situation
in which a given income is certain to a situation yielding the
same expected value for income but involves uncertainty”.
Analysis also divulged that risk of high input prices was the
most perceived risk by more than three fourths of the hybrid
maize growers while financial risk was the least perceived
by hybrid maize growers. The climate risks (high rainfall,
flood, lodging, hail storm, temperature and drought) and
biological risks (insect/pest diseases, other hybrid maize
crop related diseases) were perceived by less than three
fourths of the growers as shown in Table 1.
3.2. Factors affecting risk attitude
Probit regression was used in the present study to explore
the factors affecting farmers’ risk attitudes and risk
perceptions. The findings of the probit approach presented
in Table 2 indicate that distance from the main market, off-
farm income, and location dummies for Sahiwal District were
the imperative and significant factors determining the risk
attitudes of the sampled growers. The negative coefficient
of age presented that older growers are more likely to take
risks as compared to younger growers. The findings were
related with those by Dadzie and Acquah (2012), Ullah et al.
(2015) and Iqbal et al. (2016). Our findings recommend
that with an increase in the year of schooling of the farmer,
the risk aversion attitude also increases. Education of the
farmers (decision maker) expands his/her information on
several sources of risk, its effects at farm level and possible
strategies which can be used to protect their earnings
from various source of risk. The results were in line with
the studies of Lucas and Pabuayon (2011) and Iqbal et al.
(2016). Furthermore, the farmers situated far away from the
main market are less risk averse in nature as compared to
the farmers near to the main market. The probable reason
may be the difference of information level as farmers in
distant areas have lesser opportunities to meet input/output
dealers and progressive growers and are mostly unaware of
the emerging risks. Growers with low off-farm incomes are
found to be more risk averse in nature compared to growers
with higher off-farm incomes. Higher off-farm incomes may
indicate a greater risk bearing capacity and represents
a form of diversification that would have an influence on
farmers’ risk attitudes. The finding is in line with results of
Lamb (2003) and Iqbal et al. (2016) who also documented

Table 2 Parameters estimates of probit model

Risk perception
Explanatory variable Risk attitude
Price risk Climate risk Biological risk Financial risk
Age –0.0119 0.0151 0.0155* –0.0111 0.0063
(0.4919) (0.0097) (0.0087) (0.0090) (0.0084)
Education 0.0056 –0.0214 0.0081 –0.0346* 0.0075
(0.0198) (0.0199) (0.0184) (0.0188) (0.0177)
Maize farming experience 0.0150 –0.0321* –0.0422*** 0.0058 –0.0139
(0.0173) (0.0176) (0.0164) (0.0167) (0.0157)
Farm size –0.0008 0.0003 0.0043* –0.0009 0.0017
(0.0024) (0.0025) (0.0025) (0.0024) (0.0023)
Family size 0.0396 –0.0129 0.0043 0.0468 –0.0305
(0.0477) (0.0496) (0.0453) (0.0481) (0.0432)
Distance from market –0.0146* 0.0046 0.0094 0.0094 0.0032
(0.0084) (0.0084) (0.0079) (0.0083) (0.0076)
Off-farm income –0.2764* 0.2106 0.1712 0.0316 –0.0770
(0.1487) (0.1518) (0.1408) (0.1442) (0.1346)
Contract farming 0.1293 0.2019 0.1024 0.2724* 0.1260
(0.1562) (0.1565) (0.1438) (0.1486) (0.1389)
Extension contact –0.0835 0.2321 –0.4177** 0.3238** –0.1956
(0.1720) (0.1705) (0.1699) (0.1631) (0.1579)
Faisalabad 0.1044 –0.0553 –0.0129 –0.2962 0.1748
(0.2032) (0.2108) (0.1937) (0.2037) (0.1857)
Okara 0.0870 –0.1298 0.0999 –0.5511*** 0.4084**
(0.2061) (0.2110) (0.1978) (0.2066) (0.1913)
Sahiwal 0.4919** 0.1107 0.0854 –0.0602 0.3617*
(0.2060) (0.2287) (0.2084) (0.2212) (0.1990)
Log likelihood –204.72 –199.42 –237.73 –224.87 –260.60
LR test chi2(12) 14.61 12.32 18.21 22.7 12.8
Pseudo-R2 0.034 0.030 0.036 0.048 0.024
Prob>chi2 0.02 0.42 0.10 0.03 0.37
Number of observation 400 400 400 400 400
Figures in parentheses are standard errors. *, ** and *** represent statistical significance at 10, 5 and 1% levels, respectively.
1460 Shoaib Akhtar et al. Journal of Integrative Agriculture 2018, 17(6): 1454–1462
that growers with lower incomes are more risk averse and
avoid uncertain situations.
Moreover, the results indicate that farmers’ access to
extension workers has a negative relationship with their risk
attitudes. Access to extension workers enhance farmers’
understanding of the risks from various sources and enable
them to better manage farm level risks. However, this
relationship is statistically insignificant at 5% probability
level. It is very important for the growers to have more
and more access to market related information, crop
management information during disease and contact with
input and output dealers and agricultural extension workers
during farming. Having access to agricultural information
can enhance the farm productivity and at the same time
transform the risk attitudes of farmers (Ayinde 2008). Other
variables including hybrid maize farming experience, family
size, and location dummies (Faisalabad, Okara, Sahiwal)
have a positive and insignificant impact, but farming area has
an insignificant and negative impact on farmers’ attitudes
towards risk. Growers with more farming experience are
more risk averse in nature compared to farmers with less
farming experience. Our findings are in contrast to the
results of Ayinde (2008) who stated that farming experience
and risk averse attitude have negative relationship. Our
findings also point to the importance of farm size in relation
to farmers’ risk attitudes. The results suggest that larger
farmers tend to take more risks compared to smallholders.
Large farm size are associated with greater wealth and
greater capacity to absorb risks arising from various sources.
The findings are in contrast to the results of Lucas and
Pabuayon (2011) and Ullah et al. (2015) who documented
a positive effect of farming area on risk averse attitude of
farmers. The findings also revealed that farmers with larger
family size tend to be more risk averse in nature. Dadzie
and Acquah (2012) and Ullah et al. (2015) also found
similar findings for the effect of family size on farmers’ risk
averse attitude and argued that with higher family size the
consumption needs of the household raises which translates
into risk attitudes of the farmers.
3.3. Factors affecting risk perceptions
Table 2 represents the determinants affecting hybrid
maize growers’ perceptions of various kinds of risks. The
impact of farm and farm household characteristics on
farmers’ perception of risk are mix and mostly insignificant.
Previous studies documented a mixed effect of farm and
farm household characteristics on farmers’ risk perception
(Lucas and Pabuayon 2011; Ullah et al. 2015). Our findings
suggest that age of the growers has a negative impact on
farmers’ perception of biological risk (insect/pest diseases,
other hybrid maize crop related disease) but positive
affect on farmers’ perception of price risk, climate risk and
financial risk. Aged farmers’ consider price risk, climate
risk, and financial risk to be the potential threats to their
farm enterprise while younger farmers perceived biological
risks are the main source of risk that can change their
farm income. Similarly, farmers with more schooling years
perceived risk of climate and finance to be the main risk
sources that can undermine their incomes from farm sector
while farmers with lower educational attainments identified
price and biological risks as main risks source. Farmers
with more farming experience, consider biological risks as
the main threats as compared to farmers with lower farm
experience. Ullah et al. (2015) and Udmale et al. (2014)
also indicated that farmers with more farming experience
have higher risk perception of climate risks. Farmers with
larger farm size, consider risks of climate and finance to be
major risk sources while small holders identified biological
and price risks as major sources of risks at their farm.
Farmers with larger family size perceived price and financial
risks to be major threats while farmers with smaller family
size considered biological and climate risks to be the main
sources of risk at their farm. Distance from main markets has
a positive impact on farmers’ perception of all risk sources.
Higher off-farm income reduces farmers’ concerns of
financial risks, however, higher off-farm income is associated
with higher perceptions of biological, price and climate
risks. Our results also indicate that contract farming has a
positive impact on farmers’ perception of all risk sources.
One possible explanation for this may the fact that the higher
risk perception induce farmers to adopt contract farming to
overcome negative shocks resulting from various risks and
uncertainties. Similarly, farmers with more contacts with
agricultural extension worker perceived price and biological
risks to be higher threats to their farm earnings. More
contacts with extension workers have a negative effect on
farmers’ perceptions of climatic and financial risk sources.
The coefficients of location dummies indicate that farmers
in Faisalabad District perceived financial risk as the major
threat while farmers from Okara District perceived climatic
and financial risks to be the main sources of risks to their
farm incomes. Similarly, farmers from Sahiwal District
perceived price, climate and financial risks to be the main
sources of risks.
4. Conclusion
The present study was conducted in Punjab Province of
Pakistan using cross-sectional data of 400 hybrid maize
growers with the main objective of assessing farmers risk
attitudes and risk perceptions. Analysis also explores the
effect of various socio-economic and institutional factors on
farmers’ perceptions and attitudes. Majority of the farmers
 Shoaib Akhtar et al. Journal of Integrative Agriculture 2018, 17(6): 1454–1462
were aware of different sources of risk to which hybrid
maize crop was exposed and they also ranked those risks
according to their observations and knowledge. The findings
suggest that most of the farmers bear risk averse attitude
and the risk averse attitude may have implications in farmers’
farm and risk management decisions. Growers ranked
price, biological, climate and financial risks as major risks to
their hybrid maize crop. In addition, analysis also revealed
that distance from farm to main market, off-farm income
and age, maize farming experience, access to extension
agent, and location are the determinants significantly (either
negatively or positively) influencing farmers’ risk attitudes
and risk perceptions. Although the findings of this research
are specific to the selected hybrid maize growing districts
of Punjab Province in Pakistan, they may have wider
intimations particularly for developing countries whose
economies are mainly dependent on agricultural sector.
It is important to consider these factors during developing
and executing risk management strategies at farm level.
More investment on farmers’ education and better access
to institutional services such as farm advisory services could
help farmers better anticipate and manage the risks at farm
level. The results may also be valuable for policy makers
and other researchers to comprehend how farm and farm
household characteristics play their roles in shaping farmers’
attitudes towards risk which may, in turn, influence their risk
management decisions at farm level.
Acknowledgements
This research work was financially supported by the National
Natural Science Foundation of China (NSFC, 71473100;
NSFC-CGIAR, 71461010701).
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Managing editor WENG Ling-yun