Understanding farmers’ behavior toward risk management practices and financial access: Evidence from chili farms in West Java, Indonesia

Abstract Farmers have different characteristics in facing agricultural risks and decision-making. Access to finance is important for farmers to cope with the risks, including chili production. This research aimed to identify farmers’ behavior in facing the risks of chili production and analyze the financial and other factors that influence the behavior. The research was performed applying a survey of 300 chili farmers in West Java, Indonesia. The risk was analyzed using the coefficient of variation and risk aversion, while factors related to the farmers’ behavior in facing the risks were investigated using logistic regression analysis. The results show that chili farmers face high chili production risk. The farmers’ behavior is significantly influenced by their access to finance and farm size. This study provides insights to policymakers and financial sources, indicating the need to provide farmers with wider access to finance to help farmers cope with the risk.