Risk Preferences and the Impact of Credit and Insurance on Farm Technology Uptake

We use a series of credit and insurance simulation games to test the role of access to credit and insurance on magnitude and timing of farm technology uptake with small-scale farmers in South Africa. Using Cumulative Prospect Theory, we assess how insurance impacts technology uptake given risk preferences. Our findings suggest that risk aversion is linked to lower uptake of the insured technology. while loss averse farmers are more likely to adopt technology bundled with insurance. Higher weighting of small probability events leads to later uptake of the uninsured technology option.

Investigating the Sensitivity of Household Food Security to Agriculture-related Shocks and the Implication of Informal Social Capital and Natural Resource Capital: The Case of Rural Households in Mpumalanga, South Africa

Resource-poor rural South Africa is characterised by high human densities due to the historic settlement patterns imposed by apartheid, high levels of poverty, under-developed markets and substantially high food insecurity. This chronic food insecurity combined with climate and weather variability has led to the adoption of less conventional adaptation methods in resource-poor rural settings. This paper examines the impact of agriculture-related shocks on the consumption patterns of rural households.

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