Risk assessment of adopting agroforestry in a peasant economy : the Honduran case

Risk assessment plays an important role in evaluating new technology adoption among peasant households. The purpose of this study is to evaluate peasant behavior considering risk perception and how it affects agroforestry adoption. Data collection was conducted in 1994, in 14 villages representing three regions in the El Merendon mountain range of Honduras Central America. Stochastic dominance was used in the assessment of risk perception; discriminant analysis and the logit model were used to identify the factors affecting risk behavior. Differences in risk perception were found to exist among peasant farmers. Risk aversion was related to peasant households production constraints. Overall, agroforestry adopters were facing less restrictive constraints than agroforestry nonadopters. The disparate risk behavior among these peasant farmers were characterized by differences in the level of farm diversification, area allocated to coffee production, settlement period, and household budget constraint. Furthermore, agroforestry retention/adoption, in the long-run, will depend on the relaxation of economic and institutional constraints and on the internalization of the benefits of the tree component. The improvement of the economic, social, and cultural conditions of peasants appears to affect positively the rate of agroforestry adoption since agroforestry' s features were consistent with peasants' revealed preference