Understanding risk perception and coping strategies in agribusiness input supply chain: evidence from Enugu State, Nigeria

Abstract

Purpose The continuous negligence of risks in the agribusiness input sector, especially in developing countries, has continued to derail the agri-food system. If left unaddressed, these risks can severely undermine efforts to achieve food security and perpetuate a cycle of poverty and hunger. Therefore, this study examined the risk perception, dynamics and coping strategies in the agribusiness input supply chain in Enugu State, Nigeria. Design/methodology/approach Using two-stage sampling techniques, primary data on divergent risk variables and coping strategies were collected from 210 randomly selected agribusiness input suppliers. These data were analysed using descriptive statistics and multinomial regression. Findings The major risks identified were price volatility (94.3%), exchange rate fluctuations (93.9%), changes in government policies (93.9%), transport disruption (85.7%) and damage and spoilage (62.9%). A five-point Likert scale result showed that financial losses (x̄ = 4.77), increased cost (x̄ = 4.73), business interruption (x̄ = 4.24), reputation damage (x̄ = 4.16) and increased stress and anxiety (x̄ = 3.95) were the perceived effects of risk. The major risk coping strategies adopted include verifying product quality before selling to customers (98.6%), diversification (87.1%), maintaining accurate business records (77.1%), forming partnerships (62.9%) and transferring risk to insurance (35.7%). The multinomial logistic regression model demonstrated moderate predictive power, with a pseudo-R2 of 0.2185. Age, marital status, business experience, income and primary occupation all influenced the risk-coping strategies chosen. Research limitations/implications The study on agribusiness input suppliers in Enugu State, Nigeria, is limited by its geographical scope. Despite this limitation, it highlights key implications, including the need for effective risk management strategies, policy interventions, capacity building and future research to support agribusiness input suppliers in managing risks. Originality/value The study demonstrates that although agribusiness supply chain risk is unavoidable, its impact on livelihoods and business sustainability can be largely reduced through suitable coping strategies. Socioeconomic factors such as age, business experience and income-level influence the choice of coping strategies.