Risk attitudes, knowledge, skills and agricultural productivity

Agriculture is a risky business contingent on risks and uncertainty. Without strong technical knowledge, farmers tend to rely heavily on heuristics and subjective judgments to deal with their daily business. It is crucial to understand farmers’ practices to provide suitable supports. This study uses a rich data set from a long panel household survey to assess farmers' agricultural productivity in Hue province of Vietnam that we combine with data collected from special surveys conducted in 2014 and 2015 focusing on farmers' knowledge, skills and risk attitudes. It aims to provide an overview of the environment in which farmers do business under constraints. Particularly, we investigate the relations among risk attitudes, farmers' knowledge, management ability and agricultural productivity by using univariate and bivariate analyses. The results indicate a large variation in farmers' knowledge. Most of them have low degree of technical knowledge, but show higher subjective knowledge. Agricultural performance tends to be more dependent on subjective knowledge than technical knowledge. Accordingly, farmers received limited support from the extension institutions. While risk attitudes are significantly correlated with farmers' knowledge and decision-making ability in livestock production, it has no direct significant relation with agricultural performance. The previous outcome showed that livestock productivity is prone to fluctuation, risk-taking should be important for farmers to cope with shocks. This study suggests extension services to fill the gap between subjective knowledge and technical knowledge and to build a significant linkage between risk-taking and learning to improve farmers' abilities and consequently enhance agricultural productivity.