2002 Volume 4 Pages 32-43
The objectives of paper are to indentify how rural households in Java cope with risks and use management mechanisms and to investigate the incentive or disincentive effects of these mechanisms in food production. For these purposes, we have tried through our field survey to show evidence that rural households in our study area have adopted multiple measures for risk reduction. And we also make an empirical analysis about the incentive or disincentive effects of the mechanisms on crop production. From this study, we found that gifts through family ties and diversification of income to less risky sources gave positive incentives to enhance productivity, but share tenancy contracts had disincentive effects. We also found that serious pest damage discouraged the farmers to intensify current input use. It is remarkable that the farmers did not adopt the self-accumulation and/or deaccumulation of farm assets because it was unprofitable for the extremely small-scale Java farmers to hold fixed capital, and it was too costly to part with their owned land.
