WHERE DO RISKS IN SHRIMP FARMING COME FROM? EMPIRICAL RESULTS FROM SMALL FARMERS IN EAST JAVA, INDONESIA

Abstract

This study was conducted to explore small-scaleshrimp farmers’ perception of risk and risk management. Thedata used originated from a field survey in the southern andnorthern coasts of East Java, Indonesia. According to the results,there are 32 risk sources, including shrimp price volatilityand high mortality due to shrimp diseases as the mostimportant ones. The exploratory factor analysis showed thatthe risks in small-scale shrimp farming derived from 8 factors:input and pond preparation; finance and credit access; production;personal aspects; harvesting and marketing; weather andenvironment; policy and institutional aspects; and businessenvironment. The results also revealed that the shrimp farmers’perception of risk could significantly influence their riskmanagement behavior. Furthermore, nine factors were identifiedfor risk management strategies, including disease prevention;education and technology improvement; productioninputs; farm management; government support; risk sharingand insurance; financial aspects; household adjustment; andalternative income sources.