Selection of cropping systems technologies under risk : a study of small upland farms in Batangas, Philippines

Abstract

Risk is considered to be one of the factors that affects farmers' use of new agricultural technology. This study uses a mathematical programming technique which takes into account both income and risk considerations in evaluating some new technologies developed for small upland farmers in the Philippines. The possible impact of introducing new rice and sorghum varieties is investigated through the model. The results show that those models with both income and risk considerations with an additional priority of meeting the subsistence requirements for rice simulate actual farm decision-making better than those not incorporating risk and such an objective. The results suggest that a new rice variety will replace the traditional variety, even where it gives only a 25% additional yield. Also, the new rice technology is likely to be adopted by farmers irrespective of the degree of their risk aversion. On the other hand sorghum is adopted widely only where its price or yield is twice the existing level, although risk is not again increased. Further, given additional land of any type (either owned or share tenanted) farmers are likely at existing price and yields to plant a larger area of both a new rice variety and sorghum. Moreover, the increase in available family labour per household has little effect on the adoption of both new rice and sorghum technologies. While results are indicative of the potential of the new technologies, there are methodological and estimational problems in applying the MOTAD approach in assessing the impact of the introduction of new technologies. These would have to be considered in future studies of small farmers' decision-making. Show more