Factorial Analysis of Risk Perceptions in Agricultural Farms: Evidence From Korçë County

This study aims to analyse farmers’ perceptions of agricultural risk in Korçë County, one of Albania’s most important agricultural regions. A structured survey was conducted with 300 randomly selected farmers, representing a diversity of farm sizes and production types across the area. The data were processed using Principal Component Analysis (PCA), a statistical method that identifies latent patterns in multidimensional datasets. A total of 25 variables were examined, grouped into five key categories of agricultural risk: production, market, financial, legal/institutional, and human resource risks. Farmers assessed both the probability of occurrence and the severity of impact for each risk factor using a 5-point Likert scale. Composite risk indices were then constructed to capture the perceived significance of each risk. The PCA helped extract the principal components underlying farmers’ responses, revealing dominant dimensions of perceived risk. Findings indicate that production and market risks are the most prominent concerns among farmers, significantly influencing their decision-making, planning strategies, and the long-term viability of their farm operations. These two risk categories emerged as the most influential across the sample, suggesting a need for greater support mechanisms and risk mitigation strategies in these areas. The study highlights the importance of designing targeted agricultural policies and support services that address the specific risk priorities of farmers in Korçë County. It underscores the value of strengthening farmers’ adaptive capacity and resilience in the face of environmental uncertainties and market volatility. These insights provide a useful foundation for informed decision-making and the development of sustainable, risk-responsive agricultural development policies in Albania.