|| Bioinfo Publications || 26 World Research Journal of Agronomy ISSN: 2320-3404 & E-ISSN: 2320-5644, || Vol 2: Issue 1, 2013: 26-29 ||. Available online at http://www.bioinfopublication.org/jouarchive.php?opt=&jouid=BPJ0000009 OSONDU C.K.*, ANYIRO C.O., IJIOMA J.C. AND OBIKE K. Department of Agricultural Economics and Extension Abia State University, Umuahia Campus, PMB 7010, Umuahia, Abia State, Nigeria. *Corresponding Author: Email- yokel4life@gmail.com Received: November 14, 2013; Accepted: December 12, 2013 Introduction Agriculture remains an important economic sector in many develop- ing countries. It accounts for a large share of GNP and is a main source of employment. It is a source of growth and a potential source of investment opportunities for the private sector. Agriculture can contribute to sustaining the environment and its GDP growth is at least twice as effective in reducing poverty as non –agricultural GDP growth. Two third of the world’s agriculture value addition is estimated to be created in developing countries [1]. In agriculture- based economies which include most of sub-saharan Africa, agri- culture guarantees 29.0% of GDP on average. Also, it contributes in transforming developing countries to developed countries in which agriculture is no longer a major source of economic growth [2]. Productivity gains in agriculture are necessary for sustaining eco- nomic development in most developing countries [3]. However, agricultural investments unfortunately are among the most risky economic ventures one can embark upon. Despite the importance of agriculture in developing countries, it has always been a risky business. Risk is an event that produces an adverse variation in an outcome. In its general form, risk refers to variability around an expected value. The probabilities of occurrence of the different out- comes are known, some of which are less desirable than others and may entail a loss. Expected value is the outcome that would occur on average over time if an individual or firm were repeatedly exposed to identical conditions, decisions or scenarios. Economists make a distinction between risk in which a random set of outcomes can occur for which one knows the probabilities, and uncertainty, in which a random set of outcomes can occur for which one does not know the probabilities [4]. Because of production lags associated with crop and livestock pro- duction, Farmers are exposed to considerable risks from unex- pected changes in input and output prices to weather events, which affects yield. Agriculture also tend to be fairly capital intensive with considerable investment such as machinery and land. Farmers are often confronted with risks not only in making short-term production and marketing decision, but also with long term investment decision such as purchasing land or equipment. Agricultural business is often characterized by high variability of production outcomes or production risks [5]. Unlike most other en- trepreneurs, agriculture entrepreneurs are not able to predict with certainty the amount of outputs that the production process will yield due to external factors such as weather, pest and diseases [6]. The absolute dependence on unpredictable weather conditions like flood, hailstorm, hurricane, drought and other natural hazards, make income from arable crop production to be very unstable. Oth- er agricultural enterprises like livestock and poultry are also ex- posed to the risks which occur in catastrophic proportions. The recent cases of flooding, bird flu and pig swine in Nigeria comes readily to mind [7]. Risk situation in agriculture is diverse. According to [5] Risks that affect agriculture can be broadly grouped as; systemic/correlated risks and idiosyncratic/independent risks. Systemic risks include production risks (farming practice, weather, pests, etc.), price risks, and political risks (export bans, price caps, debt write offs, etc.). Non agricultural risks known as idiosyncratic risk are made up of personal risks which affect the entrepreneur, proprietor and or man- ager of the farm business. Risk pooling and insurance arrange- ments are more likely to offer protections against idiosyncratic risks rather than systematic risks. World Research Journal of Agronomy ISSN: 2320-3404 & E-ISSN: 2320-5644, Vol 2 : Issue 1, 2013 || Abstract- This study examined the risk management strategy by arable crop farmers in Abia State, Nigeria. The specific objectives were to identify risk common with arable crop farmers; describe risk management practices adopted by arable crop farmers; determine factors that influence the use of risk management practices; and identify constraints militating against effective risk management by arable crop farmers in the state. Multi-stage random sampling technique was used in selecting locations and respondents through which Three hundred (300) farm- ers were selected and interviewed with the use of structured questionnaire. Collected Data were analyzed using descriptive statistics, and probit regression model. Result revealed that prevalent risks in the area were pest and disease attack (88.33%), drought (61.67%) and theft (43.33%). The prevalent risk management strategies adopted by farmers in the study area were use of inorganic fertilizer (41.66%), planting on ridges (32.00%) and use of improved varieties (26.00%). The coefficient of farm size, farm experience, household size and age had signifi- cant influence in the use of risk management practices by farmers. In an attempt to ameliorate the identified risks, the major constraining fac- tor has been identified as lack of fund (70.67%). We recommend implementation of policies aimed at improving farmers’ access to loans and extension training this will help equip farmers to effectively manage identified risks. Keywords- Risk management strategy, Arable crop farmers ANALYSIS OF RISK MANAGEMENT STRATEGY BY ARABLE CROP FARMERS IN ABIA STATE, NIGERIA