IDENTIFICATION AND MANAGEMENT OF RISK IN PRODUCTION AGRICULTURE: THE CASE OF SASKATCHEWAN GRAIN AND OILSEED FARMERS
Atta, Cosmos 1983-
Agricultural risks and uncertainty play a significant role in determining the stability of farm income. Successful farm managers are those who are able to identify and manage risks they face in the production process. Farmers have different perception of sources of risk and the risk management strategies adopted to manage risk also differ based on the perception of the importance the strategy in managing risk. Therefore, it is important to understand the risk perception of specific group of farmers to provide guidance in designing appropriate risk management strategies. This study uses survey of grain and oilseed farmers in Saskatchewan to identify their most important sources of risk, risk management strategies and model how farm and producer characteristics affect the perception and management of risks in production Best-Worst Scaling and latent Class cluster analysis were the tools employed to analyse the data. The results suggest production and marketing risks such as variation in output prices, rainfall variability, change in input prices, diseases and pests, accidents and health/disability, natural disasters, unable to meet quality requirements and risk management strategies including producing at low cost, keeping financial reserve, pests and diseases control, reducing debt level, buying crop insurance, diversification, getting market information and forward contracting as important sources of risk and risk management strategies to grain and oilseed producers in Saskatchewan. The cluster analysis also showed the existence of two unique clusters based on perception of sources of risk and three unique segments in relation to their perception of important risk management strategies. The regression analysis also suggests farmers use different risk management strategies based on a particular risk faced. Several socio-economic variables including off-farm income, sales, experience, debt to asset ratio, education household income and age were found to influence farmers’ perception of risks and risk management strategies. The study should guide policy makers and service providers for appropriate targeting in the design of risk management strategies to help producers cope with risks.
DegreeMaster of Science (M.Sc.)
DepartmentAgricultural and Resource Economics
CommitteeSlade, Peter; Gray, Richard; Ayars, Morley; Nolan, James
Copyright DateJune 2018
Risk, management, oilseed, grains, farmers