Analysis of farmers’ risk aversion in southern Borno, Nigeria.

Abstract

This study examined risk aversion among farmers in Southern Part of Borno State, Nigeria. The study used mainly primary data collected from one hundred and twenty (120) farmers using structural questionnaire administered using multistage random technique. Tools used for the analyses were descriptive statistics and asymmetry of income distribution of the farmers. Analysis of results revealed that majority of the farmers were males and are above 30 years. It was also discovered that 40%, 26% and 34% of the farmers had Western education, Koranic (Islamic) and no education respectively. The asymmetry of income revealed that 78.4% of the respondents were risk averse (Asym. = 0.01 to 1), with 5.8% risk neutral (Asym. = 0.0) and 15.8% risk proclivity (Asym. = -1 to -0.01). Among those that had risk proclivity, about 73.7% were below the age of forty years, with 5.3% of the number being females. The study recommended that farmers should be educated on risk aversion and its attendant negative effects on decision making.