Synchronized Agricultural Credit and Diversification Adoption to Catastrophic Risk Manage for Wheat Production in Punjab, Pakistan

Abstract Catastrophic risks caused severe affects on agricultural production particularly in developing countries due to consecutive occurrence of unfavorable climate events. Farmers adopt risk management strategies to minimize marketing, production and financial risks in agriculture. The purpose of this study is to investigate the potential association and implementing synchronized agricultural credit and diversification adoption to catastrophic risk manage for wheat production in Punjab, Pakistan. This study used stratified random sampling technique for collecting data of 480 wheat farmers’ respondents from production based categorized six districts of Punjab Pakistan. Multinomial and bivariate probit regression models were used in the study to examine the effects of farm and social feathers, disastrous risks farmers view and their attitude to sources of risk moreover potential relationship in agricultural credit and diversification as risk management strategy. Estimates of the study indicated the association in risk management strategies adoption while adopting single risk management strategy motivates farmers to adopt another strategy at same time. Furthermore, findings also indicated as farmer schooling, age, family return, ownership of land, farm size and farmer risk oppose character were highlighted the most influenced features for adopting various risk management strategies. Policy makers and state based authorities can be assisted by the accumulated information of multinomial and bivariate probit regression models in evaluating plans of risk management and willingness of farmer in accept government supported risk managing strategies in incidence of traditional practices for managing farmhouse risk.