An Investigation of Factors Affecting the Management of Risk for the Rice Cultivating Women in Sari Town with LISREL Application

مجله اقتصاد و توسعه کشاورزی

Article 3, Volume 29, Issue 2, July 2015, Pages 126-138   

Document Type: Research Article

DOI: 10.22067/jead2.v0i0.34739

Author

M. Charmchian Langerodi^*

Islamic Azad University, Sari

Abstract

Introduction Agriculture relies on nature and farmers face environmental, social, financial and legal issues that makes farming to be consistently and strongly associated with risk. Agriculture can be considered to be the most risky economic venture. Ahmadi (1) listed several main sources of risk that farmers face. Economic risk includes price fluctuations for raw materials such as seed and fertilizer and for machinery at the pre-market delivery stage, difficulty obtaining bank credit and loans, price volatility for products in the post market delivery stage, inconsistent government policies for products and global fluctuations in the price of products. Social risk includes theft of crops, production and agricultural machinery and war. Nature-related risk includes natural disasters, climate change, agricultural pests and diseases. Market risk includes changes in the price of raw materials and products and increasing interest rates. Given that the range of agricultural activities having critical risk are diverse and the climate can vary widely, more sophisticated services are needed to meet the demands, cope with hazards and decrease risk. Understanding how women rice farmers deal with risk is essential for educators, and agriculture-related industries such as insurance, and policymakers. If the attitudes of these women towards risk are accurately recognized, risk management strategies, risk-related educational programs and risk strategies can be designed to meet their needs. The overallaim of this research isto investigate factors affecting risk management, and proposing and designing a model among rice cultivating women in Sari.
Materials and Methods: The population of the study comprised 1677rice cultivating women in Sari of whom 248 were selected through stratified random sampling. A combination of quantitative, and descriptive-inferential statistics served as the methodology for the study and SPSS 16 and LISREL were applied for data analysis. To determine the validity of the questionnaire, copies were distributed to experts in the field and their comments were recorded and relevant corrections were made. Corrected content validity was determined by experts at the Agricultural Organization of Mazandaran province, then reliability of the questionnaire was assessed by random completion of 30 questionnaires by women rice farmers in Qaem Shahr by interview and survey. Cronbach’s alpha and ordinal theta were 0.84 and 0.89, respectively. The questionnaire contained questions about age, work experience, area of owned land, extent of financial difficulty related to rice farming, and educational level of the women rice farmers. The questionnaire contained questions about risk management approaches (17 questions), sources of information for women rice farmers in Sari (12 questions) and sources for borrowing funds (7 questions). The Likert scale was: none (0), very low (1), low (2), moderate (3), high (4), and very high (5).
Results and Discussion: The average age range of women in the study was 46.68 years and their relative work experience was 26.17 years. The average financial difficulty for the women was high. The woman rice farmers were most likely to obtain loans from friends and neighbors and also to obtain financing from winning lottery. There was a significant positive relationship between information resources, borrowing resources, extent of financial difficulty, rice cultivation experience, and educational level with risk management methods. Tabatabaee et al. (30) stated that the extent of borrowing affected risk management. Tiraee (31) pointed to agricultural experience affecting risk management. Monfared (21), Torkamani and Ezatabadi (33) and Garavandi and Alibige (10) believe that the level of education affects risk management,which is consistent with the results of this study. Structural equation modeling showed that information sources influenced the use of risk management methods.Structural equation modeling showed that information sources had an effect on risk management rate which is consistent with the results of Tabatabaeeet al.(30) and Stevenet al.(29).
Conclusion: The results indicate that the average age of women was 46.68 years and their average work experience was 26.17 years, which represents a good work experience on paddy land. Women should be encouraged to pursue off-farm income sources and occupations as risk management methods. Collaborative rice farming and consulting agricultural experts are other forms of risk management. Recommended sources of information were the Internet, Jihad-e-Keshavarzi management and service center, participating in agricultural extension classes, educational publications and communicating with agricultural experts. Women farmers should be encouraged to increase their knowledge and awarenessabout the sources of risk and this can improve risk management. This should be regarded as a mission for agriculture extensions. Borrowing sources, the extent of farmer financial difficulties, work experience and educational level should be considered when risk management methods for women rice farmers are advocated.

Keywords

Risk Management; Source of information; Rice cultivating women; Sari

References

Ahmadi M. 1999. Investigating factors affecting farmers' membership in rural production cooperatives based on an innovation extension model. MS Thesis in Agricultural Extension and Education, Agriculture department, Tehran: Tarbiat Modarres University. )in Persian).

2- Alamerie K., Ketema M., and Gelaw F. 2013. Risk Management Strategies and Pesticides Use in Vegetable Production: The Case of Smallholder Farmers in Kombolcha Woreda, East Hararge Zone, Oromia National Regional State, Ethiopia. Journal of Economics and Sustainable Development, 4(7):108-116.

3- Alibigi A.M., Aliabadi V., and Garavandi S.H. 2012. The structural model of social capital component affecting villagers’ risk-taking, a case study on rapeseed farmers in Kangavar. Rural Development and Space Economics Journal, 1:59-64. (in Persian).

4- Amini A., Jamshidi M., and Sadeghi J.M. 2002. Risk related Factors and the herdsman' willingness to insure their cattle in East Azerbaijan Province. Agricultural Economics and Development periodical, 10(39):125-140. (in Persian).

5- Amini R. 2011. Insurance and Risk Management role in Agricultural Economics. Agricultural Journal, 76:21-25. (in Persian).

6- Deshmukh A.K., and Khatri D. 2012. Agriculture insurance in India-A paradigm shift in Indian agriculture, IJRESS, 2(2):138-139.

7- Ertiaee F., and Chizari M. 2006. Investigating extension experts' knowledge on agricultural product insurance. Agricultural Insurance Periodical, 3(10):54-79. (in Persian).

8- Fraisse C.W., Breuer N.E., Zierden D., Bellowc J.G., Pazd J., Cabrera V.E., Garcia A., Ingram K.T., Hatch U., Hoogenboomd G., Jones J.W., and Obrien J.J. 2006. Agclimate: A climate forecast information system for agricultural risk management in the southeastern USA. Computers and Elctronics in Agriculture, 53:13-27.

9- Jihad-e-Keshavarzi Management in Sari. 2012. Rice cultivating women in Sari classified by their relative agricultural service center. Tehran: Ministry of Agriculture. (in Persian)

10- Garavandi S.H., and Alibige A.M. 2012. Identifying factors influencing the corn farmers’ behavior in Garmsar regarding the production risk. Economics Research and Agricultural Development Journal, 2-43(2):293-300. (in Persian).

11- Ghorbani M. 2000. The insurance impact on wheat productivity in Mazandaran province using analysis model. Agricultural Economics and Development Journal, 20, 73-91. (in Persian).

12- Ghorbani M., and Jafari F. 2009. Investigating influential factors on agricultural crops risk frequencies in North Khorasan Province. Agricultural Economics and Development Journal, 23(1):41-48. (in Persian).

13- Kahan D. 2008. Managing Risk in farming/ farm management extention guide. Rural Infrastructure and Agro- Industries Division Food and Agriculture organization of the united Nations Vialedelle Terme dicaracalla. Rome, Italy. 153:38-75.

14- Khuu A., and Weber E.J. 2012. How Ausralian farmers deal with risk? University of Western Australia.Crawley WA 6009/ May 2012/ DISCUSSION PAPER 12.07.

15- Kohansal M.R., and Ghorbani V. 2008. Evaluating influential factors on cotton insurance adoption: A case study in North Khorasan Province. Agriculture and Insurance Journal, 5(15 and 16):23-46. (in Persian).

16- Liu B., LI M., Guo Y., and Shan K. 2010. Analysis of the demand for weather index agricultural insurance on household level in anhui, China. International conference on agricultural risk and food security, Agriculture and Agricultural Sience Procedia, 1:179-186.

17- Lu W., Xi A., and Ye J. 2008. Disaster Risk reduction strategies and Risk management practices: Critical Elements for adaption to climate change. UNFCC, 11 November.

18- Mansourfar K. 2006. Advanced statistical methods using applied software. University of Tehran Press, Tehran, Iran. (in Persian)

19- Marofi P., and Hamidee A. 2001. A Step towards Empowerment: A Guide to the use of micro-credit to start small income generating activities, First edition, Tehran: Ronas Publication. (in Persian).

20- Moghadsi R. 1997. Tendency toward risk-taking. Markazi Insurance Periodical, 1(1):5-9. (in Persian)

21- Monfared N. 1995. Factors influencing the rice cultivating technologies adoption and their impact on rice producer women in Mazandaran province and Shiraz. MS Thesis in Agricultural Extension and Education, Agriculture department, Shiraz University. (in Persian).

22- OECD. 2009. Managing risk in agriculture: A holistic approach. Organization for Economic Cooperation and Development. [On line] Available on: www.oecd.org/agriculture/policies/risk.

23- Olarinde LO., Manyong V.M., and Akintola J.O. 2007. Attitudes towards risk among maize farmers in the dry savanna zone of Nigeria: some prospective policies for improving food production. African Journal of Agricultural Research. 2(8):399-408.

24- Rostami F. 2007. Wheat production risk management in farming systems (a case study in Harsin). Iranian Agricultural Sciences Journal, 37(2):93-106. (in Persian).

25- Sajadi S. 2009. Assessing the rural production cooperatives changes in post-regulation period in Ghaenat, MS Thesis, Birjand: Islamic Azad University of Birjand. (in Persian).

26- Shabazi A. 2002. Educated villagers. Tehran: Cultural and Art Institute of Shaghaiegh Rusta Publishers, Inc. (in Persian)

27-Sharepour M. 2001. Structural Equation Modeling (SEM), Familiarity with LISREL application in social research. Journal of Social Sciences. 13 and 14:205-231.

28- Shortreed J., Hicks J., and Craig L. 2003. Basic frame work for risk management. The Ontario Ministry of the Environment/Network for Environmental Risk Assessment and Management (NERM), 7: 74.

29- Steven W.M., Oscar V., George F.P., Keith H.C., Thomas O.K., and Alan E.B. 2003. Extension educators΄ perceptions of risk management training needs. Journal of Extension, 41(4): 1-9.

30- Tabatabaee F., Pezeshgirad G.H., and Chizari M. 2013. Risk Management adoption in Industrial husbandry in Tehran province: Influential Structures. Iranian Journal of Agricultural Economics and Development, 43(1):135-142. (in Persian)

31- Tiraee Yari N. 2002. Factors affecting modern agricultural insurance models adoption applied by farmers in Khuzestan province. Master's thesis, Agriculture department, Tehran: Tarbiat Modarres University. (in Persian).

32- Torkamani J. 1998. Establishing risk aversion degree, technical efficiency and its influencing factors: A Case Study in Fars Province. Agricultural Economics and Development Journal, 24:49-68. (in Persian).

33- Torkamani J., and Ezatabadi M. 2001. The socio - economic factors impact on decision-making process associated with risk. Agricultural Economics and Development periodicals, 9 (33):23-45. (in Persian).

34- Zamani G.H., Karami A., and Yazdanpanah M. 2009. Factors influencing farmers' satisfaction of agricultural crop insurance policy. Agricultural Extension and Education Journal, 4(2): 53-66. (in Persian).