Factors influencing the simultaneous adoption of risk management instruments in Mediterranean irrigated agriculture

Agriculture is highly impacted by different sources of risk. There is a wide variety of management instruments that farmers can use to cover these risks. The objective of this article is to analyze the explanatory variables for the simultaneous adoption of a large set of risk management instruments. The main innovation is the methodological approach: first, we apply a hierarchical cluster analysis to identify the groups of instruments whose adoption is correlated; second, we use multivariate probit (MVP) models to analyze the influence of different factors on the simultaneous adoption of the instruments included in each cluster. The explanatory variables capture farmers' socio-demographic features, risk aversion and subjective perception of past risk experience; farms' technical-economic characteristics; and local-level climate change. The results reveal significant differences in the variables influencing the adoption of the risk management instruments. The findings can support farmers, risk management service providers, and policymakers.