**4.4. The association between the farmers' characteristics and source of risk and management perception of risks**

Multiple regression analysis was employed to investigate the relationship between the farmers' socioeconomic characteristics and the perceptions of sources of risk and risk management strategy components obtained from the factor analysis. The summated scales of sources of risk and risk strategy factors of each group of farmers were summed up and averaged based on the relevant variables in each factor structure and their internal

consistency. Before performing multiple regression analysis, all models were assessed for normality, linearity, multicollinearity and homoscedasticity to ensure the appropriateness of the equations.(29)

Sources of Risk and Risk Management Strategies: The Case of Smallholder Farmers in a Developing Economy 467

Risks related to the 'economic and political' and 'personal and farm business environment' were perceived as highly important by farmers who had off-farm work. This suggests that farmers who have off-farm work are very concerned about those risks that can disrupt their

With regard to the farm location variable, the regression result showed a strong relationship with more than half of the risk factors. Farmers in the central region perceive the 'personal and farm business environment', 'natural disaster' and 'financial situation' as more important risk factors than north-east farmers; north-east farmers are more concerned about 'economic and political' risk. This finding suggests that the sources of risk on small-holding

Constant 3.170\*\*\* 1.943\*\*\* 3.287\*\*\* 2.466\*\*\* 3.619\*\*\* Age c -0.039 -0.079 -0.306\*\* -0.056 -0.118

Farm size -0.003 0.005 -0.011\*\* -0.004 0.001 Net farm income -2.37E-07 -9.81E-07\*\*\* 1.35E-06\*\* -6.90E-07 -2.77E07

Household size 0.063\*\*\* 0.051\*\*\* 0.008 0.023 0.001 *R2* 0.034\*\*\* 0.124\*\*\* 0.064\*\*\* 0.061\*\*\* 0.021

b Factors AS1-6 are labelled as AS1=economic and political, AS2=personal and farm business environment, AS3=natural

*P*<0.1, \*\**P*<0.05 and \*\*\**P*<0.01;

1, if the highest education of the farmer is high school and higher, 0 if primary school education or less;

**Table 7.** Multivariate regression of the source of risk components and household and farm

disaster, AS4=financial situation, AS5=yields and product prices and AS6=input prices;

h 1, if farmer's farm is located in central region, 0 if a farm located in north-east region;

1, if household income greater than 90,001 baht and 0 represent otherwise.

*Risk source components b AS1 AS2 AS3 AS4 AS5* 

0.068 0.233\*\*\* 0.123 0.122 0.123

0.024 0.134 -0.098 0.013

0.281\*\*\* 0.037 0.067 0.092

0.301\*\*\* 0.313\*\*\* 0.196\*\* 0.079

0.028 -0.038 0.294\*\*\* 0.408\*\*\* 0.027

0.231\*\*\* 0.068 0.009 0.130 0.100


off-farm income.

*Independent variables* 

Off-farm work g 0.135\*

Farm location h -0.166\*

a Variables and models significant at \*

d 1, if the farmer is male, 0 if female;

Source: Field survey, 2009

1, if the farmer's age over 40 years old, 0 otherwise;

 1, if the farming experience over 30 years, 0 otherwise; g 1, if the farmer has off-farm work, 0 if no off-farm work;

characteristics of all sampled Thai farmers (n=800) a

1, if farm has a loan, 0 if farm without a loan; and

Highest education e

Farming experiences f

Finance farm business i

income j

c

e

f

i

j

Annual household

farms differ significantly between these two regions.

Gender d -0.024 -0.199\*\*\* -0.182\*

