Journal of Agricultural Economics and Rural Development

JAERD

Vol. 3(1), pp. 085-090, June, 2016. www.premierpublishers.org, ISSN: 2167-0477

Research Article

Impact of agro-ecosystem on risk management in

agriculture in some selected areas of Bangladesh
Md. Razib Hossain1*, Md. Akhtaruzzaman Khan2, Mushfeka Ahmed3
1*

Lecturer, Department of Agricultural Finance and Cooperatives, Bangabandhu Sheikh Mujibur Rahman Agricultural
University, Gazipur-1706, Bangladesh.
2
Professor, Department of Agricultural Finance, Bangladesh Agricultural University, Mymensingh-2202, Bangladesh.
3
M.S in Agricultural Finance, Department of Agricultural Finance, Bangladesh Agricultural University Mymensingh-2202,
Bangladesh.
This definite study was conducted based on the relationship of agro-ecosystem and the income
level to judge the risk in farming among the respondents in the study areas. The reason for the
study was to clarify the farmers about the risks and uncertainties in farming. Three Upazilas
namely Gouripur, Ishwarganj and Haluaghat from Mymensingh district were selected with a view
to analyzing the changes of biodiversity and its impact on income diversification. Several
indexes like Shannon, richness, evenness, dominance and income diversity index were
calculated for the plants, animals etc. to measure the changes among these species and its
contribution on income level. The study was conducted in 2014 and the mean income index was
found highest (2.15) in Ishwarganj which means the respondents were earning from more than
two sources that helped them to reduce risk in farming. Most of the respondents in Ishwarganj
were involved in tree plantation, animal rearing, vegetables cultivation or business that lead the
highest richness indexes (2.68) and (0.61) in plant and animal rearing than other two areas. The
dominance indexes were also found lowest (0.40) and (0.30) respectively that lead to the
diversification of enterprises.

Keywords: Agro-ecosystem, risk management, diversification, biodiversity, uncertainties

INTRODUCTION
Biodiversity is an important regulator of agro-ecosystem
functions, not only in the strictly biological sense of
impact on production, but also in satisfying a variety of
needs of the farmer and society at large. Agro-ecosystem
managers, including farmers, can build upon, enhance
and manage the essential ecosystem services provided
by biodiversity in order to work towards sustainable
agricultural production. This can be achieved though
good farming practices which follow ecosystem-based
approaches designed to improve sustainability of
production systems (FAO, 2016). Risk and uncertainty
are ubiquitous in agriculture and have numerous sources:
the vagaries of weather, the unpredictable nature of
biological processes, the pronounced seasonality of

production and market cycles, the geographical

separation of producers and end users of agricultural
products, and the unique and uncertain political economy
of food and agriculture within and among nations.

*Corresponding Author: Md. Razib Hossain, Lecturer,

Department of Agricultural Finance and Cooperatives,
Bangabandhu Sheikh Mujibur Rahman Agricultural
University, Gazipur-1706, Bangladesh, Phone: +88
01727972778, E-mail: razibbau09@gmail.com
Tel.:
+88
01621106959,
E-mail:
mushfekamypakhita@gmail.com
Tel.: +88 01734128911, E-mail: azkhan13@yahoo.com

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Hossain et al.

085

Managing agricultural risk is particularly important for

smallholder farmers, who are usually already vulnerable
to poverty and lack the resources to absorb shocks.
Typical shocks such as drought or a pronounced drop in
market prices prevent poor households from acquiring
assets or making the most of the assets they have (Cole
et al. 2008). Exposure to risk prevents farmers from
easily planning ahead and making investments. In turn,
risk inhibits external parties willingness to invest in
agriculture because of the uncertainty about the expected
returns. Improved management of agricultural risk has
significant potential to increase productivity-enhancing
investments in agriculture (World Bank 2005). Risk can
be defined as imperfect knowledge where the
probabilities are known; uncertainty exists when these
probabilities are not known. Many of the losses expected
from the risks inherent in modern agro-food systems are
in fact related to uncertain events for which there are no
known probabilities, although subjective probabilities can
be conjured by expert opinion (Jaffee, Siegel, and
Andrews 2010). The traditional risks to agriculture in
developing countries include inclement weather of all
kinds (floods, droughts, hail, snow, windstorms,
hurricanes, and cyclones), pest and disease outbreaks,
fire, theft, violent conflict, and hardships of the sort that
farmers have always feared. Livelihood diversification
includes both farm and non-farm activities which are
undertaken to generate income, additional to that of the
main household activity, via the production of agricultural
and non-agricultural goods and services, sale of waged
labor, business or self-employment in small firms, and
other strategies to minimize risk (Carter, 1997).

Several biodiversity research initiatives were taken by the

government. The National Conservation Strategy (NCS)
emerged in September 1986. Its primary goal was the
sustainable use of natural resources. The National
Conservation Strategy Implementation Project 1 (19941999) was a five-year project implemented by the
Ministry of Environment and Forest (MoEF), with financial
and technical support from NORAD and IUCN (Ali and
Ahmed, 2001). Noticeable changes were found among
various tree, animal and fish species in the study areas.
Some changes were positive but some were detrimental
for the whole ecosystem. According to the diversity index
tree diversity was highest in Ishwarganj (1.62) (Table 1)
compared to other two areas which revealed that this
region was moderately densely populated by tree
species. Along with that the farmers were mainly
interested in planting the trees having higher growth rate
like
Shegun
(TectonagrandisL.f.)),
SilKoroi
(Albiziaprocera (Roxb.) Benth). Due to the evenness
impact in Gouripur the relative abundance of the tree
species was found lowest (0.24) and highest in
Ishwarganj (0.53) (Table 1). The formal relation among
the indexes is that the higher richness and evenness
indexes will pave the way for a higher diversity index. The
diversity index for both plant and animal species was
highest in Ishwarganj which was also the reason for the
highest mean income level (2.15) from Table 3. The
mean income level revealed that the respondents of
Ishwarganj were diversified in terms of income generation
and aware about the risk in farming than other two areas.

Agricultural diversification is the change in enterprise

choices and input use decisions based on market forces
and profit maximization principles (Pingali and Rosegrant,
1995). This diversification implies a shift of resources
from primary staple crop, namely rice to other cereal
crops, from cereals to non-cereal crops, and from crops
to non-crop (livestock, fisheries and forestry) agriculture.
Biodiversity is the most vital fact for environmental
balance. Bangladesh has subtropical evergreen and
deciduous forest tree species that has potential growing
capacity to be included in economic forestry activities like
massive plantation (Das 1982). There is an invisible
relationship between nature and ecosystem which is
called as social ecological system (SES). A social
ecological system refers to a linked system of people and
nature (Walker and Salt, 2006). In a social ecological
system the system is viewed holistically as one, where
humans depend on ecological systems for their survival
and also influence the ecosystem by their direct or
indirect use (Walker and Salt, 2006). Management of the
human or natural part of the system separately makes
the system more vulnerable and it is thus important to
manage them jointly and view the system as one
(Chapin, Folke, and Kofinas G. 2009).

A number of studies have been undertaken on agroecosystem and risk management. For precedent,
Pongsiri et al (2009) conducted a study on the
disturbance and changes of ecosystem and its impact on
human health and concluded that, any disturbance of an
ecosystem can induce genetic changes in disease
pathogens (e.g. change in pathogen virulence), changes
in the population dynamics of vector or host species
(abundance, diversity, composition and distribution),
changes in community (predation and competition) and
changes in structural diversity (complexity, fragmentation
and distribution of habitats and area species
relationship). A study conducted by (CBD, 2006; 2007)
on livelihood and biodiversity loss showed that, the
poorest people of those poor countries, who depend most
immediately upon local ecosystems for their livelihoods
are somehow responsible for the degradation of
biodiversity and will mostly affected by the consequence
of this biodiversity loss.

REVIEW OF LITERATURE

Musser and Patrick (2001) follow Baquet et al. (1997)

and defined five major sources of risk in agriculture.
Production risk concerns variations in crop yields and in
livestock production due to weather conditions, diseases

Impact of Agro-ecosystem on Risk Management in Agriculture in Some Selected Areas of Bangladesh

J. Agric. Econ. Rural Devel.

and pests. Marketing risk is related to the variations in

commodity prices and quantities that can be marketed.
Financial risk relates to the ability to pay bills when due,
to have money to continue farming and to avoid
bankruptcy. Legal and environmental risk concerns the
possibility of lawsuits initiated by other businesses or
individuals and changes in government regulation related
to environment and farming practices. Finally, human
resources risk concerning the possibility that family or
employees will not be available to provide labor or
management.
Cardinale et al. (2012) conducted a study on the
evidence for the effects of biodiversity on ecosystem and
mentioned that it was often mixed. The study revealed
that there were positive trends or impact for woods,
fisheries, pollination and fresh water purification but
negative trend was found for pest controls in the review
of relationships between different diversity levels
(species, genetic and trait). Ellis (1998) identified four
types of risks: natural hazards (weather, pests and
diseases), market fluctuations (of output prices), social
uncertainty (due to differences over control of resources)
and state actions and wars. According to Hardakeret et.
al., (2004), three major types of risk in farming can be
identified; yield, price and transaction risks.
Wenconget et. al., (2006) found that, the decision makers
risk preference affects the type of agricultural activities
and corresponding scales that are selected. It also affects
micro agricultural production structure and stable growth
of households income. Given a fixed amount of
productive resources such as arable land, capital and
labor force, the combination of production activities with
the highest level of expected income/risk would be
selected if the decision maker was a risk taker. A new
scenario of wider availability of information about the
distribution of risk and increased awareness of farmers
about risk may stimulate the development of market
solutions and new strategies to manage risk. But this is
hard to assess with the scarce information available. It
has even been argued that climate change and the
corresponding increase in the frequency of extreme
events may not increase variability of farm revenue or
income at all (Van Asseldonk and Langeveld, 2007)

086

Haluaghat. A simple random sampling technique was

used to collect the data from the respondents of the study
areas. From each of the study areas 20 samples were
taken to conduct the research. Primary data were
collected by using structured interview schedule. The
secondary data used in this study were from text books,
journals, research reports and online materials. The
statistical terms like the percentage, standard deviation,
calculation of averages and calculation of various indices
like Shannon diversity index, Evenness index, Species
richness index, index of dominance and income diversity
index were performed to fulfill the objectives.
Species Diversity Index
One of the most commonly used species diversity
measures is the Shannon diversity index. This index
combines the concepts of species richness and
evenness. The value of the Shannon diversity index is
usually between 1 and 4 and is rarely higher than 4.
When the number of species in the sample is high the
Shannon diversity index may exceed 4. Shannon and
Weaver (1963) used the following equation to measure
the species diversity:
The species diversity index was measured by using the
following equation:
H- = - p ln p (1)
Where, H-= Shannon diversity index; p = importance
probability for each species = n/N; n = number of
individuals within each species; N = total number of
individuals.
Species Richness Index
Biological diversity was measured by using species
richness index .It can be expressed by the following
equation:
D = (S-1)/ln N . (2)
Where, D = species richness index; S = number of
species; N = total number of individuals.
Species Evenness Index
Evenness of diversity was calculated by using evenness
index. The measure ranges from 0 to 1 and can be
expressed by the following equation:
E = (H-)/ln S .. (3)
Where, E = evenness index; H- = Shannon index

METHODOLOGY
The study was conducted in Mymensingh district which is
rich in biodiversity. Considering the objectives of the
study three Upazilas namely Gouripur, Ishwarganj and
Haluaghat were selected. Three villages from Gouripur
namely Dapunia, Yousufabad and Satuti, another four
villages from Ishwarganj namely Matikhola, Morichar
Char, Charalbil and Char Pubail and three villages Norail,
Sumonia Para, Hadisermor were selected from

Species Dominance Index

Index of dominance is measured by the abundance of the
most common species in an ecosystem. It is the inverse
of the evenness index and ranges from 0 to 1.
The species dominance index was measured by using
the following equation:

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Hossain et al.

087

Table 1. Different Indexes of Tree Species in the Study Areas in 2014

Indexes
Shannon Index
Richness Index
Evenness Index
Dominance Index

Gouripur
0.74
2.47
0.24
0.75

Ishwarganj
1.62
2.68
0.53
0.40

Haluaghat
1.15
2.67
0.37
0.60

Source: Field Survey, 2014

Table 2. Different Indexes of Animal Species in the Study Areas in 2014

Indexes
Shannon Index
Richness Index
Evenness Index
Dominance Index

Gouripur
1.24
0.58
0.89
0.34

Ishwarganj
1.29
0.61
0.93
0.30

Haluaghat
1.17
0.60
0.84
0.36

Source: Field Survey, 2014

c = (n1/N) 2 . (4)
Where, c= index of dominance; n1= number of each
species; N= total number of individuals.
Income Diversity Indices
This is an important index for the calculation of the
livelihood typologies of the respondents in the study
areas. This index is mainly used because it is useful to
find out a summary statistic that captures both income
shares and in a single figure that can be compared
across sample groups. An index of diversity, as
commonly used in studies of biodiversity and also found
in portfolio analysis in financial economics, promises to
be useful in this regard.A number of different diversity
indices were tried out and initially on a set of hypothetical
data. Of these, it was considered after experimentation
that a measure proposed by Chang (1997) described
diversity best in terms of both the number of activities and
the distribution of total income between them. In addition
this index has appeal that it is relatively simple to
calculate, the formula for doing so being:
1
Sum of squares of proportional contributions tototal income

Furthermore, the logic of the formula suits the application

being addressed since the index is the inverse of an
index known as the Herfindahl-Hirschman Index. The
maximum index value possible is equal to the number of
income sources, and this would be attained if total
income was equally distributed between each source.
Calculation of Standard Deviation
The standard deviation was calculated by using the
following formula

Where Xi is the observed values of the sample items

and is the mean value of these observations, while the
denominator N stands for the size of the sample: this is
the square root of the sample variance, which is the
average of the squared deviations about the sample
mean.

RESULT AND DISCUSSION

Impact of Agro-ecosystem in Risk Management for
Ishwarganj
The results in Table 1 indicate that, diversified tree
plantation habit was practiced by the farmers of
Ishwarganj (1.62) Upazila. This diversification trend
paved the way for higher richness (2.68) and evenness
(0.53) indexes but lowest dominance (0.40) index in
Ishwarganj Upazila. Lower dominance index means there
was less biasness in tree plantation and the farmers were
used to plant all categories of trees. Because of the high
richness and evenness indexes the diversity index was
found higher among the farmers of Ishwarganj. This trend
of unbiased tree plantation created a mutually exclusive
relationship between the farmers and the ecosystem
which is also called as social ecological system (SES).
This social ecological system in tree plantation
contributed towards the income generation of the farmers
and also this habit protected the biodiversity. As like trees
or plants, animal also act as the container of ecological
balance in an agro-ecosystem. Table 2 shows the result

Impact of Agro-ecosystem on Risk Management in Agriculture in Some Selected Areas of Bangladesh

J. Agric. Econ. Rural Devel.

088

Table 3. Calculation of Mean Income Diversity Index and Standard Deviation

Location
Income indices
Standard deviation

Gouripur
1.88
0.63

about the scenario of diversity, richness, and evenness

and dominance indexes of animals in the study areas.
The study focused that, animal diversity was highest in
Ishwarganj (1.29). As for other two indexes richness and
evenness were usually higher 0.61 and 0.93 respectively
in the study area. The justification for higher richness and
evenness indexes for animal species was that, the
farmers usually kept goats or cows as the livestock and
these animals were mostly dependent on leafs from trees
or the grass. As a result the respondents had two or more
alternative sources of income. Table 3 shows the mean
income diversity index and standard deviation for the
study area. The mean income diversity was 2.15 which
explained that the respondents were earning from more
than two sources. The value also represented that due to
the diversification of enterprises the respondents were
not depending only on animal rearing but also on plant
species and fish species or vegetable cultivation or nonfarm income generation activities which was also helping
them in reducing the risks in agriculture sector. And, if
losses occurred in plant then they could easily meet up
the losses from other enterprises. It was also obvious that
the farmers in Ishwarganj were more risk free than other
respondents in other study areas due to the
diversification of agriculture.
Impact of Agro-ecosystem in Risk Management for
Haluaghat Upazila
The results in Table 1 represent the values of different
indexes for the study area. As like as Ishwarganj the tree
diversity index was higher (1.15) which also was the
result of higher richness (2.67) and higher evenness
(0.37) indexes. The dominance index was also relatively
lower (0.60) that revealed that the respondents were less
biased in tree plantation or cereal production. But in case
of animal rearing the scenario was different. This study
area had a lowest diversity index (1.17) from Table 2.
Although the richness index from Table 2 was
satisfactory (0.60) but due to lower evenness index (0.84)
the diversity index decreased. The richness index was
satisfactory only for Cow rearing due to the availability
from border areas of the country. Comparatively almost
all of the respondents were involved in tree plantation
rather than animal rearing. Table 3 shows the results of
mean income diversity index which was 2.04, which
meant that the respondents were earning their livelihood
mostly from two sources basically from tree or cereals
and animal rearing or fish cultivation. The result also
revealed that the respondents were not free from risk in

Ishwarganj
2.15
0.64

Haluaghat
2.04
0.64

farming because there was a possibility of crop failure or

death of animals and no third option. The respondents of
this study area were mediocre regarding the
diversification of enterprises. They were also mediocre in
terms of risk which is less risky than respondents from
Gouripur but more risky from the respondents of
Ishwarganj

Impact of Agro-ecosystem in Risk Management for

Gouripur Upazila
While considering the results from Table 1 for the study
area it was found that, in case of Gouripur the diversity
index was lowest (0.74) in 2014 that also referred lowest
tree richness index (2.47) and lowest tree evenness
index (0.24). The result showed that the farmers of this
study area preferred to plant only limited number of tree
species which were basically cash plants like Mehogani
(Swieteniamahagoni
(L.)
Jacq.),
Rain
tree
(Albizialebbeck (L.) Benth.) etc. hence the dominance
index (0.75) was also highest in Gouripur which meant
that these tree species were dominating other tree
species. In some cases only the cash plant plantation
idea resulted negative impact on the ecosystem of the
study area. The reason was that, this practice
encouraged large scale tree cutting followed by small
scale tree plantation. In terms of animal rearing the
diversity index was (1.24) from Table 2 which was greater
than Haluaghat due to relatively higher evenness (0.89)
and lower dominance (0.34) indexes. From Table 3 the
mean income diversity index was 1.88 which was the
lowest among the three study areas which meant that the
respondents were basically earning from less than two
sectors either animal rearing or fishing or cereal
production or tree plantation. Very few of them were
trying to adopt at least two enterprises for their livelihood.
The result also predicted that the respondents were
relatively in a risky position than other two areas.

CONCLUSION
This comparative study was initiated to explore the
changes of biodiversity and its impact on the livelihood
and risk in the agriculture sector among the respondents
in the study areas. Biodiversity is an important concept,
which is the dynamic system of the nature where all types
of living components and beings interact, cooperate and
share living components with each other. If anyhow the

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Hossain et al.

089

chain is broken then the whole system will be collapsed.

If this happens then the environment will be changed and
ultimately the farmers will be affected most because they
have to depend on the plants, animals and other species
to earn their livelihood. So, if they face the risk in farming
again and again then all other productive enterprises will
be collapsed due to risk. Among three study areas the
tree and animal species diversity were mentionable and
highest in Ishwarganj which were 1.62 and 1.29
respectively. This result showed that the farmers of this
study area were conscious and unbiased in tree
plantation to protect the environment. Along with that
their efforts helped to keep a sound and healthy wild
nature in forest and also domestic nature in household
level. This phenomenon also helped them for the
diversification of farming showed by the income diversity
index (2.15). But comparatively the farmers of other two
study areas were biased in their choice of tree plantation
and rearing domestic animals. As a result the mean
income diversity indexes were also lowers (2.04 for
Haluaghat and 1.88 for Gouripur) and the risk in farming
was higher. The advantage of this study was that, it
helped to find out some informations which were
alarming for the agro-ecosystem and biodiversity of
Bangladesh along with the transformation of risk in
agriculture sector due to the diversification of farming.
This study also helped the farmers for increasing the
consciousness about the risk management in agriculture.

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Impact of Agro-ecosystem on Risk Management in Agriculture in Some Selected Areas of Bangladesh

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Accepted 25 June, 2016
Citation: Hossain R, Khan A, Ahmed M (2016). Impact of
Agro-ecosystem on Risk Management in Agriculture in
Some Selected Areas of Bangladesh. Journal of
Agricultural Economics and Rural Development, 3(1):
085-090.

Copyright: 2016 Hossain et al. This is an open-access

article distributed under the terms of the Creative
Commons Attribution License, which permits unrestricted
use, distribution, and reproduction in any medium,
provided the original author and source are cited.

Impact of Agro-ecosystem on Risk Management in Agriculture in Some Selected Areas of Bangladesh

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