Researchers and officials interested in people’s attitudes toward risk when designing public policies should make sure that their questions about risk are asked in the specific context of the policy rather than in general abstract questions.

While livestock is an integral component of the mixed crop-livestock farming system in Ethiopia, there is competition between crops and livestock for the limited feed resources. The residue after harvest is one source of livestock feed but has other potential uses, including leaving it on the field to conserve soil and water and reduce weeds. The current practice is open access grazing, in which any farmer’s livestock can eat the residue left on another farmer’s fields.

The general policy prescription for resource‐rich countries is that, for sustainable consumption, a greater percentage of the windfall from resource rents should be channeled into accumulating foreign assets such as a sovereign public fund as done in Norway and other developed but resource‐rich countries. This might not be a correct policy prescription for resource‐rich sub‐Saharan African (SSA) countries, where public capital is very low to support the needed economic growth. In such countries, rents from resources serve as an opportunity to scale‐up the needed public capital.

The present study investigates the effects of combinations of climate smart agricultural practices on risk exposure and cost of risk. We do this by examining the different risk components – mean, variance, skewness, and kurtosis – in a multinomial treatment effects framework by controlling weather variables for key stages of crop growth. We found that adoption of combinations of practices is widely viewed as a risk reducing insurance strategy that can increase farmers’ resilience to production risk.