Risk factors in the agriculture sector

Abstract

Slovakia has the character of a countryside state. It is unique by that despite of the worldwide tendency, Slovak citizens are migrating from the cities to the countryside. It is the second most countryside state of the EU, with more than one half of the population living in the rural areas. Even higher is the share of the rural area of Slovakia. In the complex, as well as structured evaluation of the agricultural performance of the Slovak Republic within the EU, Slovakia belongs to the weakest countries. Our current agriculture is struggling to cope with the organizational and legal issues, it seeks to bring into operation the land market, to supply the internal market by the quality and affordable goods. Necessarily, it must increase the productivity, recover the production capacity of the land resources and constitute viable units. Those could compete with other entities, respectively, they could be an adequate partner in the EU in the framework of subsidies.The farmers, in order to improve their position, must fight not only with the external factors of the environment, but also with many issues of the internal management of the enterprises. The overriding objective must become the orientation on the strategic management of the enterprises, while their effort is often focused on the survival because of the significant issues and the agrarian enterprises lack the coherent vision of the certainty of their future development. The part of the strategic management is also the risk management. The ability of an early detection and effective management of the risks is an integral part of the strategic management of every agricultural organization. Subjects, which are not aware of the scope and the strength of the impact of risk, and will not create the effective mechanism for its management, are endangering their existence. The effective risk management can be secured only in the case, when there is a clearly defined strategy of the Abstract: Th e agricultural sector je characterized by the fact that there is a high level of risk. It was always this case, but in the last years, there is a tendency of the increasing of the risk. Th e ability of early detection and eff ective management of the risks is an integral part of the strategic management of every agricultural organization. Th e paper presents the procedure and outcomes of the questionnaire survey aimed at the occurrence of the risk factors and approaches to the risk management in the enterprises of the primary agricultural production in Slovakia. Th e survey is focused on the individual character of the risk. Th e results of the survey point out the fact, that Slovakian farmers perceive the price risk, production or income risk as the most important risk factors, and the diversifi cation as a most important strategy of the risk management. Th e most signifi cant positive correlations were found between the land size and the perception of the price risk importance, between the number of years in offi ce and the perception of the price risk importance. Concer...

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