Risk management strategies on small-scale commercial farms in three zobatat of eritrea

Abstract

In this study the perceptions of small-scale commercial farmers in Eritrea of the importance of various risk responses are ascertained and analysed to gain insight into their risk-management strategies. Data were elicited through a survey of 186 small-scale commercial farmers conducted in three zobatat (regions) of Eritrea. Factor Analysis is used to investigate heterogeneity in sample farmers’ responses. Results indicate that relatively more important risk responses include the use of internal and external sources of information, on-farm and off-farm diversification, choice of production system and product marketing arrangements. Farmers’ perceptions of risk responses vary according to farm type, geographical location, farm and farmer characteristics, as well as the existence of enterprise specific risk responses (e.g. livestock insurance) and differences in the marketing regulations of various agricultural products.