Role of Environmental Risk
Past research conducted in the CGIAR and elsewhere has demonstrated some effects of risk on the behavior of individual farmers in the developing countries. In some cases, it may constrain the adoption of new techniques; in others, it may serve as a reason to diversify production and income strategies. Some evidence suggests that an equally strong relationship may exist between risk and property rights and collective action in natural resource management:
- Risk management can be a motivation for common property regimes.
- Access to a diverse range of resources tends to enhance the income and consumption-smoothing capacity of individuals and groups and may be particularly critical when financial and insurance markets are lacking.
- Collective action may strengthen protection against risk by broadening opportunities for risk pooling.
