The economic literature showed that remittances could replace missing credit
and insurance markets. As a result, it is natural to expect that higher amounts of
remittances will motivate agricultural farmers to engage in riskier activities. The
present study aims to verify the latter hypothesis by answering two distinct questions:
do households that receive higher remittances choose to cultivate a riskier
crop portfolio; do households that receive higher remittances choose to engage either
in crop specialization or in crop diversification? I use the Living Standards Measurement
Study-Integrated Surveys on Agriculture (LSMS-ISA) dataset on Uganda
established by the World Bank to test these hypotheses. The results show that
remittances have no significant impact on farmers risk decisions in terms of crop
portfolio and crop diversification. There is some evidence that credit constrained
households that receive remittances engage in crop specialisation, which can be
interpreted as a wealth e?ect.