Risk management strategies are made up of response variability that may lessen the likeliness of an unfavorable event occurring and/or decrease the damaging consequences if that event happens. To minimize the risk, farmers respond in three ways which are considered to be risk managing tools; these are production, marketing, and financial responses. This study aimed to look at the potential associations and effects of implementing multiple risk management techniques at the same time, as very limited number of research is available in this field. Stratified random sampling technique was used to collect 350 farmer's responses from four different agro-ecological districts of Bangladesh. This study applied bivariate and multinomial probit models to investigate the effects of social and farm features, farmers' views of disastrous risk, and their attitudes toward risk sources, as well as potential associations between diversification and agricultural credit as a risk management tool. The outcomes identified the correlation between adoptions of multiple risk management strategies and concluded that one risk management approach can convince farmers to follow another at the same time. Moreover, the outcomes observed that age, educational status, farm size, family returns, land ownership, and risk-opposed character of farmers were the most persuading aspects for adopting different risk management strategies. Besides, the results presented other interpretations and information which will clarify farmer's actions when it comes to handling various devastating risks and will also provide the policymakers with a platform to prepare for appropriate risk managing plans concerning farmers.
Keywords: Agricultural credit; Bangladesh; Catastrophic risk; Diversification; Probit model; Risk managing approach.
© 2021. The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.