Smallholder farmers' risk management and innovation strategies and their impacts on poverty and resilience

在非洲之角，粮食不安全、农业生产力低下和贫困问题继续存在，该区域最近发生的粮食危机就是明证。资产禀赋不足、市场失灵和制度薄弱使小农无法投资于有效的土地利用战略，使他们陷入贫困。许多风险因素，特别是随着气候变化预计将进一步增加的气候变化，以及近年来观察到的价格波动加剧，将限制农民在未来进一步提高农业生产力和摆脱贫困的可能性。为了应对不确定的环境，小农采用各种多样化战略，以尽量减少陷入贫困状态的不利风险，包括与作物和牲畜有关的多样化以及非农活动。分散投资降低整体收入风险的有效性取决于不同收入来源收益的方差和协方差。然而，多样化通常涉及降低风险与农民和牲畜饲养者能够赚取的收入之间的权衡。在作物和牲畜生产中采用农业创新可能导致生产力和福利的提高；然而，由于资金要求和涉及的风险，小农往往无法采用它们，因此，他们仍然陷入贫困。以非洲之角最大的国家埃塞俄比亚为例，拟议研究的目的是确定小农采用主要农业创新的制约因素。因此，农民的风险暴露、风险偏好以及包括非正式金融机构在内的社会网络的作用将成为分析的重点。此外，这些创新在家庭层面的福利影响将被量化。拟议的项目将扩大分析风险下的技术采用的研究前沿，预计将大大提高贫穷和风险农业环境下技术采用模型的解释力，有助于更有效的政策设计。此外，该项目将通过开发和测试创新的假设和非假设方法来推进社会科学研究方法，从而从经验上得出农民的风险偏好，这些风险偏好被假设为风险下技术采用的重要决定因素。

In the Horn of Africa, food insecurity, low agricultural productivity and poverty continue to persist, as illustrated by the recent food crisis in the region. Poor asset endowments, market failures, and weak institutions prevent smallholder farmers from investing in efficient land use strategies, keeping them trapped in poverty. Numerous risk factors, especially climate variability, which is expected to increase further with climate change, and increased price volatility as observed during recent years will constrain farmers` possibilities to enhance agricultural productivity and escape from poverty even more in the future. In response to their uncertain environment, smallholder farmers apply various diversification strategies to minimize the downside risk of falling into a state of destitution, encompassing crop and livestock related diversification as well as off-farm activities. The effectiveness of diversification to reduce overall income risk depends on the variance and covariance of returns from the different income sources. However, diversification typically involves a trade-off between risk reduction and the amount of income that farmers and livestock keepers are able to earn. The adoption of agricultural innovations in crop and livestock production would likely lead to productivity and welfare increases; however, smallholders are often unable to adopt them because of the capital requirements and risks involved and, hence, they remain trapped in poverty. Using Ethiopia, the largest country in the Horn of Africa, as an example, the objective of the proposed research is to identify the constraints to the adoption of major agricultural innovations by smallholder farmers. Hereby, farmers’ risk exposure, risk preferences, and the role of social networks, including informal financial institutions, will be particular foci of the analysis. Moreover, the welfare impact of these innovations at the household level will be quantified. The proposed project will expand the research frontier in the analysis of technology adoption under risk and is expected to considerably improve the explanatory power of technology adoption models in poor and risky agrarian settings, contributing to more effective policy design. Furthermore, the project will advance social science research methods by developing and testing innovative hypothetical and non-hypothetical methods to empirically elicit farmers’ risk preferences, which are hypothesized to be important determinants of technology adoption under risk.