Determinants of financial risk management strategies used by maize-based farmers to cope with climate change impacts in south-south Nigeria

Abstract

The study examined the determinants of financial risk management strategies used by maize-based farmers to cope with climate change  impacts in South-South Nigeria. Multistage sampling techniques were used for selection of 260 maize-based farmers from 36  communities in the study area. Primary data collected through the use of a set of questionnaire and interview schedule. The Kuder- Richardson (KR-20) reliability test yield 0.802, indicating that the results of this research are valid and reliable, Variance Inflating Factor  (VIF) values was greater than one and within the acceptable region. The Tolerance is approximately one (1) which shows that  multicollinearity does not exist. The data were analyzed using multivariate probit (MVP) model. The result of MVP model shows that age  (0.007) is significant at 0.05 level, while off-farm job opportunity (0.157), access to credit (0.168), extension contact (0.277) and farmers  association (-0.380) were significant at 0.01 level determined the adoption of diversification of incomes. Educational level (-0.020) and access to credit (0.323) were significant at 0.01 level, while maize farm size (0.051) and extension contact (0.141) were significant at 0.05  level determined the adoption contract farming. Farm experience (0.005) and flood (-0.121) were significant at 0.05 level while extension  contact (- 0.230) is significant at 0.01 level determined precautionary (personal) savings. High pest and diseases infestation (0.061) is  significant at 0.05 level and access to credit (0.533) is significant at 0.01 level determined the rate of utilizing credit facilities as financial  risk management by the maize-based farmers. The study recommends diversification, climate-smart practices and access to financial  tools in minimizing overall risk or losses.