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Tuesday, November 24, 2009

Risk Management in Agriculture: A Holistic Approach

Many and varied sources of risk in agriculture are produced by a farmer, any decision should take into account the many uncertainties. Various strategies can be developed and markets equipment and, however, and in this context that the OECD project on risk management in agriculture is a potential action and government policy analysis is demanded.

Why a holistic approach to risk management in agriculture?

Conceptual framework and fully released by the OECDs goal three main points: the risk is based on the type, farmers strategies and government policies. Any analysis and policy advice focus on the relations:

  • Individual farmers risk should source / farm level are not independent.
  • Risk management is part of a strategy, account management strategy in agriculture, and agricultural production, finance and manufacturing sectors and decide on market instruments (futures, insurance, contracts ...) use, such as use only well affected, including all types, government programs and policies.
  • Risk characteristics, such as frequency and type of severity of injury, they farm level (layer normal risk) or the necessary equipment market (market, limit of insurance or layer), there still in the market failure must control. Government policies and actions should be based on clear objectives, and will improve the efficiency of allocation.
  • Number of policy guidelines has emerged. For example, policy actions designed to relations between the different risks to assist in developing one type of equipment should have hands of farmers, should be improved information sharing and policy objectives should be specific goals , for efficient and least developed countries distorted.

What is the nature and magnitude of risk exposure in agriculture?

Output and input prices to farmers, are exposed to risks associated with production, and the risk of non-farm income sources. Is there anything more relevant than others? What is the relation between them? How does variability when individual or aggregate level, measured separately? How are risks perceived by these manufacturers?

What is the importance of risk-related agricultural policy measures?

Agricultural policies that either there is a risk or to reduce the burden on the family farm income to reduce risk by reducing the results are looking for. Based on information from a database analysis of OECD public sector, the World Trade Organization commitments, domestic support and other OECDs Information Overview of the risk work - OECD countries and selected emerging economies provides measures related.

An on-going project on Risk Management in Agriculture
The following components are part of this ongoing project:

  • Risk management in agriculture a thematic review
  • Agricultural risk management strategies and policies at the level of analysis
  • Risk and price volatility of the overall model Exogenous analysis
  • A conference taking place last trimester of 2010 to analyze the work to date.

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