The role of irrigation in farmers ' risk management strategies in France

We analyze the way French farmers manage production risks, especially the risk of drought. To this end, we assess the role of irrigation in farmers ' risk management. Based on FADN accountancy data, we jointly estimate farmers ' attitudes to risk and their production decisions. We correct for sample selection bias and endogeneity. Results of the probit model show that irrigation technology serves as a self-insurance. Results of the joint estimation show that irrigating farmers have higher means but lower variance of profits than non-irrigating farmers. However, for already irrigating farmers, using more water volumes increases the variance of outcome