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The purpose of this paper is to present theoretical synopsis of risk balancing hypothesis (RBH) and estimate empirical models examining debt, savings and debt-to-equity use decisions of small US farms.

The authors use primary survey data from Tennessee and generalized linear models (GLMs).

The study’s findings suggest that the perceived higher business risk (BR) significantly increases the extent of debt use, savings use and debt-to-equity of small farmers. Moreover, results indicate that factors such as age and education of the operator, family involvement, incomes, land acreage, adoption of alternative on-farm enterprises and farmers' continuation plan significantly influence the financing decisions of small farm operations.

The authors investigated an essential empirical question examining the risk balancing behavior of small US farm operations. While risk balancing has been a theme of several studies, none of the previous studies have specifically looked at the behavior in the context of small US farms. The theoretical synopsis and empirical findings contribute to the literature of risk balancing, debt use and savings use decisions and the policy discussions on farm financial and support strategies.

The purpose of this paper is to investigate the impact of internet usage on financial performance of small farm business households in the USA. In particular, the authors want to assess the impact of internet usage on small farm businesses, where the owner’s main occupation is farming. Using a nationwide farm-level data in the USA and a non-parametric matching estimator, the study finds a significant positive impact of internet usage on gross cash income, total household income, off-farm income. The study further suggests that small farm businesses receive benefits from internet usage as it facilitates reduction in income risk through off-farm income sources, as well as a reduction in marketing and storage costs; households’ non-farm transportation and vehicle leasing expenses.

In this study, the authors use the “nearest neighbors” matching method in treatment evaluation, developed by Abadie and Imbens (2002). In this method, a weighting index is applied to all observations and “nearest neighbors” are identified (Abadie et al., 2004). Although matching estimation through the nearest neighbor method does not require probit or logit model estimation per se, the authors have estimated a probit model because it allows the authors to check the balancing property and to analyze the association of included variables with the likelihood of internet use.

The study suggests that small farm business households using the internet are better off in terms of total household income and off-farm income. As compared to the control group (which is counterfactual, representation of small farm businesses not using the internet), small farm businesses using the internet earn about $24,000-$26,000 more in total household income and about $27,000-$28,000 more in off-farm income. Also, small farm businesses using the internet earn about $4,100-$4,900 more in gross cash farm income compared to their counterpart. The estimate of ATT for NFI is not different from zero. However, gross cash farm revenue increased significantly.

To this end internet can provide an important role in information gathering. Internet is one of the convenient means to access and exchange information. Information and communication facilitation through internet have opened up new areas of commerce, social networking, information gathering, and recreational activities beyond a geographical bound. Producers and consumers can take advantages of internet in both collaborative and competitive aspects in economic activities as it can reduce the information asymmetries among economic agents.

Farmers will seek assistance in interpreting data and applying information to their farming operations, via the internet. Therefore, it is essential that land grant universities continue to improve the delivery of electronic extension and provide information in a clear and concise manner.

Studies in farm households have mainly investigated factors influencing internet adoption, purchasing patterns through internet, internet use, and applications. In most cases, impact analyses of communication and information technologies such as internet in agricultural businesses are discussed with references to large scale farm businesses. Thus, the authors know very little about access to the internet when it comes to small farm businesses and small farm households and about how it impacts well-being of small farm households.

Unsafe food consumption results in adverse health conditions, foodborne illness and undernutrition among households and communities. The consumption of food contaminated with harmful microorganisms or with harmful pesticide residuals results in adverse health conditions and undernutrition. However, there are a number of challenges to maintaining food safety in the food systems of developing countries, like Nepal, where awareness of food safety is low and research on these issues is lacking.

We conducted an experiment among youth aged between 20 and 26 years in Nepal to assess their food safety awareness and affinity to safer fresh produce choices. In the classroom setting experimentations with and without information nudges conducted among 224 youth participants, participants chose one fresh produce packet among the four. We analyzed results using multinomial and mixed logit models appropriate for discrete choice modeling.

We found that the youth’s perceived higher importance of sustainable food systems and their knowledge levels on microbial contamination and foodborne illnesses play significantly positive roles. The likelihood of choosing microbial safety-labeled fresh produce or both microbial- and chemical safety-labeled fresh produce increased with nudging among those who have some knowledge of microbial contamination and foodborne illnesses – we found that the interaction of nudging and level of knowledge is significantly positive. Youth belonging to higher income classes do not necessarily have a higher affinity to safer fresh produce but with nudging, the higher income class youth have a higher likelihood of choosing safer fresh produce choices.

Youth engagement and their awareness of food safety could be one of the important strategies to potentially develop them as effective promoters, adopters and educators in enhancing food safety in food systems in Nepal. Our predicted premium for food safety attributes points to the potential scope for the emerging market segment or business opportunities augmenting food safety in Nepal.

We examined the factors influencing the safer fresh produce choices among youth in Nepal. We tested whether awareness levels of microbial contamination and foodborne illness and information nudging affect the likelihood of safer fresh produce choice. Then we predicted the willingness to pay (premium) for safety attributes. To the best of our knowledge, none of the previous studies have examined this aspect in Nepal.

In Nepal, crop insurance is at initial phase. However, since its implementation seven years ago, the adoption rate has been fairly low even with the government's lucrative subsidy on premium. There have been very limited studies on specifics of insurance for different crops, and farmer's acceptability on insurance. This study examines WTP for tree-based insurance, a potential insurance scheme on fruit crops in hilly areas of Nepal.

The authors used a contingent valuation method to estimate farmer's willingness to pay (WTP) premium for insurance. They used a double-bounded dichotomous choice (DBDC) framework to elicit WTP and an interval regression method to estimate the WTP model.

The authors found that the farmers revealed WTP for tree-based insurance is three times higher than the premium they would pay under government's current subsidy plans of insurance. The authors’ result from interval regression also suggests that the factors such as farm size, farmer's adverse experience about invasive pest and weather, awareness of crop insurance, farming experience, and family involvement in agriculture significantly influence farmers' WTP.

A distinct modality of insurance, like tree-based insurance for fruit crops in mid and high hill areas, may enhance the adoption rate rather than a broad area-based plan generalized for all crops.

Only a few studies have examined specifics of insurance in fruit crop insurance in developing countries. The authors’ estimated WTP factors influencing WTP on citrus fruit-crop insurance in Nepal indicates that there is a scope for extending this insurance program. However, the authors also found that there is a gap in understanding of crop insurance and have limited awareness on the government's subsidy programs among farmers.

The agricultural sector in the USA has experienced significant structural changes. For accommodating farm business, households have diversified their operations adopting various strategies—agricultural, structural, environmental, and income strategies. The purpose of this study is to analyze the factors influencing farmer’s diversification strategies while taking into account the simultaneous decision-making process.

This study uses a nation-wide farm household data from the US. The diversification decisions are analyzed using multivariate probit regressions.

The study suggests that agricultural, structural, environmental, and income diversification strategies are interlinked. Specifically, results indicate that, on one hand, environmental and income diversification strategies are positively interlinked. On the other hand, agricultural and structural diversification strategies are positively interlinked. Additionally, the factors representing location, farm, and farmer characteristics, farm type, and financial condition of the farm are major determinants in the choice of farm diversification strategies.

In this paper, diversification activities are broadly classified under four strategies: agricultural, structural, environmental, and income. Depending on the context and country, the definition and strategy set may need revision.

Strong complementary between diversification strategies suggests that studies analyzing farm household decisions and strategies need to account for the simultaneous decision-making process. As decisions are interlinked, separately analyzing one specific strategy may lead to biased estimates. Farm business households need to develop multiple skills and flexible capacities to tackle farming-related issues, including structural changes, risk management, and income enhancing activities. Improving employment opportunities for the rural farming population can stimulate structural diversification.

This paper contributes to limited literature about diversification by analyzing factors influencing different diversification decisions and finds interlinkage between decisions.

The purpose of this paper is to study the production and efficiency of rice growers in drought prone areas with special attention given to economic and financial factors.

The authors use a parametric stochastic frontier approach and a non-parametric data envelopment analysis.

The study found that financial and liquidity constraints negatively influence production efficiency while off-farm work positively influences efficiency in drought prone areas.

Many biotic and abiotic factors affect the production efficiency of rice growers. Among abiotic stress, drought is the strongest constraint affecting nearly one third of the total rice area in Asia and causing significant economic losses. Farmers’ economic conditions and financial constraints further exacerbate the situation. However, very few studies have analyzed the efficiency in drought prone areas and the influence of economic and financial factors. This study contributes to in this regard by augmenting economic and financial factors in the efficiency estimation of drought prone areas using parametric and non-parametric approach.

To determine the factors that motivate rural households to supply ganyu labor and to estimate its impact on food security.

Data from the 2010/2011 Malawi household survey were used. A probit model to evaluate the determinants of ganyu labor supply and a propensity score-matching estimator to assess its impact on food security were used.

Less educated males are more likely to supply ganyu labor. Ganyu labor supply increases with household size, while it decreases with the level of crop farming and size of land owned. Results from the average treatment effect indicate a positive and significant impact of ganyu labor participation on the number of meals consumed per day.

Ganyu labor participants in Malawi have better access to food as a result of cash income from ganyu. Government support mechanisms such as minimum wage regulations should consider the welfare of ganyu labor participants.

The purpose of this study is to determine the impact of off-farm work on food security in rural Bangladesh. We use rural household-level data and a nonparametric propensity score matching (PSM) estimator. Matching estimators are used in observational data to address the potential selection biases caused by nonrandom allocation of the treatment. Monthly food-consumption data and household income and expenditure surveys from rural Bangladesh for 2013–2014 are used in this chapter. We found that rural Bangladeshi households participating in nonfarm income-generating activities, especially in higher return nonfarm employment, enjoy higher levels of per-capita food expenditures and diet diversity – two of the measures of food security. In particular, we find that rural households increased diet diversity in cereals, fruits and vegetables, and meats. Finally, our estimates reveal that rural households participating in off-farm work increased per-capita food consumption by about Taka 1,576, on average, and increased per-capita expenditures on milk and milk products (Taka 212), and fruits and vegetables (Taka 235) significantly. Policy makers should design and implement policies that create off-farm livelihood activities. These nonfarm activities would help smallholder farm families to diversify, to supplement their income, and to continue their agricultural operations as well as increase food security.