Review on Smallholders Farm Risk and Management Strategies in Ethiopia

Abstract

Agriculture is the main driver for Ethiopia’s growth and long-term food security as it contributes high share to GDP growth. However, farming is exceptional risky sector where; the operators faced with risk due to many factors that affect the decisions which cannot be predicted with exact accuracy. Agriculture is challenged by input and output price variability, high financial risks, weather shocks, such as floods, drought, or cold weather, human and animal health problem. Risk management in the country has become increasingly important in all aspects of the agricultural sector, to reduce the probability of an unfavorable event occurrence and adverse consequences to the farm households. Farm households used different coping strategies depending on type of risk they encounter. Risk management strategies were more dominantly based on ex-post risk Strategies than ex-ante risk Strategies, as most of them done for recovery purpose after occurrence of shocks. Use of irrigation, soil and water conservation, income and farm enterprise diversification, insecticide and pesticide use, sale of productive assets like livestock, migration to other better areas, reduction of meals taken per day, and planting of early and drought resistant crop were some of major coping strategies farmers use in Ethiopia.

Keywords: Agriculture, Coping strategies, Ethiopia, Risks, Smallholder