Understanding farmers' risk perception and attitude: A case study of rubber farming in West Kalimantan, Indonesia

Abstract

Indonesian rubber farming has the largest area in the world, but its implementation faces various risks that decrease productivity and farm income. This study is designed to specify the risk perception, risk attitude and determinant factors for smallholder rubber farmers. The research location was in four subdistricts in West Kalimantan Province, with a sample size of 200 farmers. Data collection was carried out by interview using a structured questionnaire. The risk matrix, Holt and Laury's method and the logit model were used to identify risk perception, risk attitude and determinant factors. The study results showed that most rubber farmers were risk-averse and perceived climate change, plant diseases and price change as high risks. The logit model found that farmers' age, education, rubber plantation size, rubber age, distance and use of rubber clones had a positive and significant effect on farmers' risk perception, while the family size and farming experience had a negative effect. Regarding risk attitude, the logit model found that rubber age, distance and risk perception of price change had a positive and significant effect on farmers' risk aversion, while farmers' age and use of rubber clones had a negative effect. This study recommends providing informal education to the farmers through training and counseling, encouraging the farmers to replant old or damaged rubber trees and adopt rubber clones. Furthermore, it is also necessary to improve road facilities and infrastructure, communication and transportation access to facilitate farming activities.