How Prolonged Droughts and Farm Subsidies Influence Entrepreneurial Ventures by Farmers
Vol. Volume 20, Number 4 December/2015
A conceptual model of entrepreneurial uptake by water scarce farmers explores how farmers accumulate social and human capitals while managing multiple risks in current and future livelihood choices. Social networking and human capital accumulation differentially impact on success in agriculture and entrepreneurial ventures. The risks of farm subsidy removal and the uncertainties associated with finding and succeeding in a suitable enterprise, present the farmer with difficult tradeoffs in terms which type of capital to accumulate. Results suggest that in the presence of multiple risks, farmers may act so as to increase their investments in human capital even when chances of finding a suitable business opportunity are low whereas in other cases they may accumulate more social capital to enhance their farm subsidy support even under better chances of finding suitable business ventures. Further, an increase in risk of future agricultural unviability by itself does not promote entrepreneurial uptake.
Farm subsidies; risk of business failure; water scarce agriculture; human capital; social capital; social networking; entrepreneurial activity