Farmers’ Risk Perception and Risk Management Practices in International Comparison

Palinkas, Peter; Szekely, Csaba

doi:10.22004/ag.econ.47554

Cited by 1 publication

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“…1.7.1 Risk management strategies adopted by farmers in developing and developed countries. From Table 2, we observe that in most of the developed countries, like the USA, New Zealand and other EU countries, risk management strategies are common, such as crop, livestock, property and commercial insurance; forward contracts; hedging; futures and options; and spreading sales (Boggess et al, 1985;Meuwissen et al, 2001;P alink as and Sz ekely, 2008;Desmukes and Harwood, 2000). Borrowing and on-farm and off-farm diversification are the risk management strategies used by farmers in developing countries such as Ghana and India (Dadzie and Acquah, 2012;Ramaswani et al, 2003)…”

Section: Risk Management In Agriculturementioning

confidence: 99%

“…A more efficient risk management system will help farmers raise their living standards and provide an opportunity for more investment in the agribusiness sector (OECD, 2011). In a comparative study between Europe’s and the USA’s risk management practices, Pálinkás and Székely (2008) revealed that those countries in which agriculture plays a key role in their economies must consider an effective risk management system.…”

Section: Introductionmentioning

confidence: 99%

“…From Table 2, we observe that in most of the developed countries, like the USA, New Zealand and other EU countries, risk management strategies are common, such as crop, livestock, property and commercial insurance; forward contracts; hedging; futures and options; and spreading sales (Boggess et al ., 1985; Meuwissen et al. , 2001; Pálinkás and Székely, 2008; Desmukes and Harwood, 2000). Borrowing and on-farm and off-farm diversification are the risk management strategies used by farmers in developing countries such as Ghana and India (Dadzie and Acquah, 2012; Ramaswani et al ., 2003); crop diversification, asset accumulation, crop sharing, adopting technologies and performing best farm practises are the risk management strategies used by farmers in Indonesia (RIMES, 2012); and diversification and precautionary savings are used by farmers in African countries such as Mali, Ethiopia and Sudan.…”

Section: Introductionmentioning

confidence: 99%

“…Researchers have carried out work to identify the risk management strategies adopted by farmers in one country or a group of countries in comparisons – such as Pálinkás and Székely (2008) and Asseldonk et al . (2016).…”

Section: Introductionmentioning

confidence: 99%

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Risk sources in agriculture and farmers’ behavior in risky prospects: a systematic review

Shah

Alharthi

2023

MSAR

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PurposeThe agricultural sector is a critical component of global economic development, and its significance has grown significantly in recent years. The risks associated with agriculture and the behaviors of farmers in handling these risks are becoming increasingly important, given the sector’s increasing dependence worldwide. Various activities related to agriculture are vulnerable to multiple risks, which can have severe consequences for farmers’ livelihoods. The purpose of this systematic review is to present a comprehensive analysis of the sources of risk faced by farmers and their choices in adopting risk management strategies worldwide.Design/methodology/approachThe Preferred Reporting Items for Systematic reviews and Meta-Analyses protocol was utilized to select relevant literature, and a total of 102 studies were analyzed. Through the use of Venn diagrams and graphical methods, the authors provide a transparent overview of the risks faced by farmers and the adoption of risk management strategies in developed and developing countries.FindingsFrom the analysis, the authors found that, in terms of risk management strategies, diversification, reserve credit and accumulated assets are frequently used in developing countries, while developed countries tend to rely on future/forward contracts, crop insurance and hedging. Diversification is the most widely used risk management strategy across both developed and developing countries. Our study also highlights the different perceptions of weather-related risks among growers in developed and developing countries.Practical implicationsThis systematic review provides valuable insights into the risks associated with agriculture and farmers' strategies in managing these risks, which could inform policy decisions and promote sustainable agricultural practices. For instance, understanding the individualistic nature of farmers' risk perception and the varying risk sources and management strategies depending on the locality and provide assistance to the farmers accordingly.Originality/valueThe paper explains how farmers behave during uncertainty in terms of risk perception and their decision to adopt risk management strategies in developed and developing countries.

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