Abstract
Indian farmers have been facing significant production risks that have substantially decreased their potential yield. To reduce these risks, farmers employ various tactical strategies. The choice of strategy, however, depends mainly on their risk attitude and perceptions. This study examines the factors influencing farmers' risk attitude and perceptions based on the survey of 350 cotton farmers from Virudhunagar district in Tamil Nadu, India. Risk attitude is evaluated using a Multiple Price List (MPL) experimental method, while the risk matrix is utilised to measure the risk perception of drought, uneven rainfall distribution, and pests and diseases. Logit model is applied to assess the variables associated with farmers' risk attitude and perceptions. The findings reveal that 75% of the respondents exhibit risk-averse behaviour, while only 12% display a risk-seeking attitude. The majority of respondents identify drought and rainfall as major risks compared to pests and diseases. Logit model results show that gender, education, organisational membership, irrigation access, farming experience, access to credit, contact with extension personnel, and yield loss negatively influence farmers' risk attitude. Similarly, organisational membership, a higher share of non-farm income, more farm size, irrigation availability, and credit accessibility reduce the farmers' risk perceptions. These findings help policymakers understand how local farmers perceive farm risks such as drought, rainfall variations, and pests and diseases and consider these viewpoints when developing sustainable adaptation measures. This study highlights the significance of farmer group organisations, improved extension services, and credit access in shaping farmers' risk attitude and perceptions, thereby enhancing farm productivity.