Risk implications of farm technology adoption vary by technology type. If properly implemented, the safety net program and the weather insurance programs currently piloted in some parts of Ethiopia are actions that could hedge against downside risk.
In countries where insurance and credit markets are thin or missing, production and consumption risks play a critical role in the choice and use of production inputs and adoption of new farm technologies. Adoption of new farm technology could increase production risk either by increasing yield variability or increasing probabilities of crop failure. It is therefore important to fully understand the risks of farm technology adoption so as to design appropriate adoption and conservation policies and risk-hedging strategies.
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