Determinants of Rice Farmers’ Risk-attitudes in Rural Ghana: An Operational Domain Scale Approach

Abstract

Production of rice in Ghana has been marred by various production risks which reduce the yield potentials of farmers. The introduction of agricultural insurance presents an opportunity to mitigate these risks. However, individual preferences for risk-mitigating strategies are dependent on their risk attitudes. And this is affected by a broad spectrum of characteristics. This study, therefore analysed the determinants of the risk attitudes of rice farmers in the Greater Accra region of Ghana. Their risk-attitudes were obtained using an operational domain-scaled statement set. Majority of the respondents (96.14%) were found to be risk averse. The gender, household size, land tenure system and the ratio of non-farm income to rice farm income were found to significantly affect the probability of risk neutrality whiles marital status, land tenure system and the probability of failure to achieve target yields were observed to significantly influence the probability of being risk-loving. Further study is recommended to identify the relationship between these risk attitudes and adoption of crop insurance.