Evaluation of farmers' attitude and perception toward production risk: Lessons from Khyber Pakhtunkhwa Province, Pakistan

The variations in farming risk are classified into three key categories: market liberalization, natural disasters such as floods or drought, and climate change. This study aims at filling the existing research gap by the assessment of risk attitude and risk perceptions toward various types of risks. Primary data of 600 respondents were collected through a structured questionnaire in four flood-prone districts namely Peshawar, Mardan, Charsadda, and Nowshera of Khyber Pakhtunkhwa (KP) province of Pakistan. Equally Likely Certainty Equivalent and risk matrix techniques were utilized in determining the risk attitude and risk perceptions among the farmers. A probit regression model was used to analyze the relationships among dependent and independent variables. Findings of the study show that majority of the farmers were risk-averse, and floods, high input prices, crop diseases, and excessive precipitation were the main risks perceived by the farmers. Results of the probit regression model indicated that age, education level, farm location, off-farm income, and access to market information were the main factors that affect the farmers' risk attitude and perceptions. The research offers essential findings that can be used by policy-makers in the farming sector and researchers to understand risk attitude and perceptions of farmers empirically.