Empirical Analysis of Farmers' Drought Risk Perception

Abstract

Drought-induced water shortage and salinization are a global threat to agricultural production. With climate change, drought risk is expected to increase as drought events are assumed to occur more frequently and to become more severe. The agricultural sector's adaptive capacity largely depends on farmers' drought risk perceptions. Understanding the formation of farmers' drought risk perceptions is a prerequisite to designing effective and efficient public drought risk management strategies. Various strands of literature point at different factors shaping individual risk perceptions. Economic theory points at objective risk variables, whereas psychology and sociology identify subjective risk variables. This study investigates and compares the contribution of objective and subjective factors in explaining farmers' drought risk perception by means of survey data analysis. Data on risk perceptions, farm characteristics, and various other personality traits were collected from farmers located in the southwest Netherlands. From comparing the explanatory power of objective and subjective risk factors in separate models and a full model of risk perception, it can be concluded that farmers' risk perceptions are shaped by both rational and emotional factors. In a full risk perception model, being located in an area with external water supply, owning fields with salinization issues, cultivating drought-/salt-sensitive crops, farm revenue, drought risk experience, and perceived control are significant explanatory variables of farmers' drought risk perceptions.