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The role of irrigation in farmers’ risk management strategies in France

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  • Sébastien Foudi
  • Katrin Erdlenbruch
Abstract
We analyse the way French farmers manage production risks, especially the risk of drought. To this end, we assess the role of irrigation in farmers’ risk management. Based on the European Farm Accountancy Data Network data, we jointly estimate farmers' attitudes to risk and their production decisions. We correct for sample selection bias and endogeneity. Results of the probit model show that irrigation technology serves as a self-insurance. Results of the joint estimation show that irrigating farmers have higher means but lower variance of profits than non-irrigating farmers. However, for already irrigating farmers, using more water volumes increases the variance of outcome. , Oxford University Press.

Suggested Citation

  • Sébastien Foudi & Katrin Erdlenbruch, 2012. "The role of irrigation in farmers’ risk management strategies in France," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 39(3), pages 439-457, July.
    • Handle: RePEc:oup:erevae:v:39:y:2012:i:3:p:439-457
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    File URL: http://hdl.handle.net/10.1093/erae/jbr024
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