Does risk management affect productivity of organic rice farmers in India? Evidence from a semiparametric production model

Author(s)
Lien, Gudbrand
Kumbhakar, Subal C
Mishra, Ashok K
Hardaker, J Brian
Publication Date
2022-12-16
Abstract
<p>This study analyzes the effects of farmers' risk on productivity where the production function is generalized to be specific to risk variables. This resulted in a semiparametric smooth-coefficient (SPSC) production function. The novelty of the SPSC approach is that it can explain the direct and indirect channels through which risk can affect productivity. The study uses several measures of risk, including attitudes toward risk, perceptions of risk, and risk management skills of farmers. It then shows how these risk-related variables affect productivity both directly and indirectly via the inputs. Using 2015 farm-level data from organic basmati rice (OBR) smallholders in India, the study finds that OBR farmers with high degrees of risk aversion had lower productivity than less risk-averse or risk-neutral OBR farmers. Additionally, OBR farmers who were most concerned about production risks (i.e., weather and pest risks) had higher productivity than their counterparts. Finally, the study reveals that OBR farmers can reduce production costs by increasing farm size.</p>
Citation
European Journal of Operational Research, 303(3), p. 1392-1402
ISSN
1872-6860
0377-2217
Link
Publisher
Elsevier BV
Rights
Attribution 4.0 International
Title
Does risk management affect productivity of organic rice farmers in India? Evidence from a semiparametric production model
Type of document
Journal Article
Entity Type
Publication

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