JWSS - Journal of Water and Soil Science

Successful implementation of socio-economic projects depends on the degree of planners’ awareness of farmers’ risk coefficient. Because agriculture is a risky activity, knowledge about the farmers’ attitudes toward risk in each area is essential. This research investigated the farmers’ risk behavior in Homayjan district in Sepidan township. Cross-section and time series data were collected from a random sample of farmers and from Agricultural Department of Fars Province, respectively. In this study, the Safety First Rule (SFR), Generalized Stochastic Production Function (GSPF) and Target Motad models were used.

The results indicated that in this area, farmers are risk averse in crop production, but they have a low risk coefficient in the use of modern inputs. Signs of GSPF revealed that the use of modern resource input reduces risk. Target Motad risk programming model confirmed that farmers are risk averse because with increasing risk, crops like wheat that have relatively stable prices and yield enter the model, while crops like onion that have high instability in price and yield are omitted from the model.