Journal of Saffron Research

Journal of Saffron Research

A Comparative Analysis of the Vulnerability of Small- and Large-Scale Saffron Farmers to Production and Market Risks: Evidence from Selected Areas of Torbat Heydariyeh and Zaveh Counties, Iran

Document Type : Original Article

Authors
Morteza Yaqubi 1
Moein Tosan 2
1 1- Department of Agricultural Economics, Faculty of Agriculture, University of Torbat Heydarieh, Iran& Saffron Institute, University of Torbat Heydarieh, Iran.
2 Department of Irrigation and Reclamation Engineering, University of Tehran, Iran.
10.22077/jsr.2026.11814.1313
Abstract
Introduction: Smallholder farmers in Iran's saffron sector face significant market and production risks. Globally, smallholders bear a disproportionate share of agricultural risk owing to limited cash reserves, insurance, and bargaining power. Iran produces approximately 90% of the world's saffron, primarily in the Khorasan provinces. Saffron cultivation combines production risks - water scarcity, climate variability, corm diseases, and labor shortages - with market risks such as dependence on export markets, market-structure problems, and international sanctions. This study examines whether smallholder saffron farmers perceive greater vulnerability to production and market risks than large-scale farmers, and whether their objective economic performance differs. The contribution lies at the intersection of the farm size–productivity literature, agricultural vulnerability research, and the literature on the divergence between objective and subjective resilience. Conceptually, objective vulnerability is grounded in observable material conditions, whereas perceived vulnerability reflects farmers' cognitive appraisal of threats and response capacity; the two dimensions may converge under systemic shocks but diverge under information asymmetries.

Materials and Methods: Primary data were collected from 108 saffron farmers in seven districts of Torbat Heydariyeh and Zaveh counties using convenience sampling during the 2023–2024 crop year. Perceived vulnerability was measured with 24 challenge items on a seven-point Likert scale, grouped into four domains: production (9 items), domestic market (5), foreign market (5), and processing (5). Objective economic performance was measured by total farm profit and total revenue (million IRR). Farm size was encoded as an eight-level ordinal scale (level 1: <2,000 m²; level 8: >20,000 m²) and as three classes (small, n = 28; medium, n = 18; large, n = 62). Ordered probit and ordered logit models were estimated for the challenge items; for economic outcomes, OLS with heteroskedasticity-robust (HC3) standard errors was used, complemented by quantile regression and non-parametric tests (Kruskal–Wallis H; Mann–Whitney U with Bonferroni correction). Cronbach's alpha assessed scale reliability.

Results and Discussion: The central finding is an asymmetry between objective economic performance and perceived vulnerability. Farm size strongly predicts economic outcomes: large farms earn 166 million IRR more profit than smallholders (p < 0.001), and the advantage grows across the profit distribution (86.02 versus 220.00 million IRR at the 25th and 75th percentiles). The Spearman correlation between farm size and profit is ρ = 0.608 (p < 0.001). By contrast, farm size does not predict most perceived challenges: of the 24 items, only reputational damage in foreign markets differs significantly across farm-size groups (H = 11.664, p = 0.003), with smallholders scoring 5.89 versus 4.58. The three focal challenges - smallholder constraints, liquidity shortage, and skilled-labor shortage - show no statistically detectable differences across size groups, although the data do not establish formal equivalence. Because Cronbach's alpha fell below 0.70 for the production (0.506), domestic-market (0.322), and foreign-market (0.501) domains, these composites were treated as descriptive and inference focused on individual items; the processing domain (α = 0.828) and the overall index (α = 0.709) were psychometrically defensible. Response distributions were concentrated in the upper categories (range 2–7; item means 4.84–5.82), consistent with a ceiling effect that may compress between-group differences. This asymmetry is interpreted within the objective–subjective resilience framework: systemic saffron risks shape perceptions across all farm sizes, whereas the sole differentiator - foreign-market reputational risk - reflects Iran's export-market structure, in which smallholders, less connected to export chains, perceive standard and reputational requirements as more binding.

Conclusion: In Iran's saffron sector, perceived vulnerability appears to be a shared condition built on material fragilities that extend beyond farm size. While large farms enjoy a substantial income advantage, farmers across all size classes report similar production and market pressures. Five policy directions follow. First, because farm size raises profit (166–172 million IRR) but does not reduce perceived vulnerability, size-based transfers are an inefficient vulnerability-reduction instrument. Second, given the high severity of shared production challenges (liquidity shortage: 5.56; skilled-labor shortage: 4.84 on the seven-point scale), saffron crop insurance with subsidized premiums and short-term credit should be accessible to all size classes. Third, skilled-labor training in harvest and processing can be organized through cooperatives. Fourth, the smallholder-specific reputational-risk finding (5.89 vs. 4.58) calls for guaranteed-purchase and pre-sale contracts with exporters, shared packaging and standardization facilities, and group quality certification. Fifth, export-oriented large farms need specialized instruments: export-credit guarantees, export-credit insurance, and currency-risk hedging. Future research should combine objective and subjective vulnerability measures, exploit longitudinal designs to capture climate, sanctions, and currency shocks, and test the proportional-odds assumption on the full microdata.
Keywords
Ordered probit model
Razavi Khorasan
Risk
Saffron
Vulnerability
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