scholarly journals An Evaluation of Risk Management Strategies for Dairy Farms

1992 ◽  
Vol 24 (2) ◽  
pp. 173-182 ◽  
Author(s):  
Darrell J. Bosch ◽  
Christian J. Johnson
Keyword(s):  
Risk Management ◽  
Risk Aversion ◽  
Crop Yields ◽  
Crop Insurance ◽  
Management Strategies ◽  
Dairy Farm ◽  
Dairy Farmers ◽  
Net Returns ◽  
Base Scenario ◽  
Risk Management Strategies

AbstractVariability in feed prices and crop yields are important sources of risk to dairy farmers. A simulation model of a representative dairy farm was used to evaluate crop insurance and hedging as risk management strategies. These strategies lowered expected net returns but also reduced risk. The preferred set of strategies at lower levels of risk aversion included hedging and crop insurance, although a base scenario in which no risk management strategies were employed was also efficient. The preferred strategy at higher levels of risk aversion was a combination of crop insurance and hedging.

scholarly journals Risk perception and risk management strategies on New Zealand dairy farms according to ownership structure and geographic location

2005 ◽  
pp. 97-102
Author(s):  
R. Pinochet-Chateau ◽  
N.M. Shadbolt ◽  
C.W. Holmes ◽  
N. Lopez-Villalobos
Keyword(s):  
Risk Management ◽  
New Zealand ◽  
Risk Perception ◽  
Ownership Structure ◽  
Management Strategies ◽  
Geographic Location ◽  
Perception Of Risk ◽  
Dairy Farmers ◽  
Risk Management Strategies ◽  
Risk Sources

New Zealand has had many changes in the dairy industry during the last twenty years. As NZ dairy farming has particular characteristics (e.g. differing ownership structures, geographic areas) risk perception and management strategies may differ significantly between them. No studies have been undertaken regarding the differences in perception of risk and risk management strategies used by different gr oups of dairy farmer s. A survey of 1000 NZ dairy farmers was conducted in 2004 and further analysed to address this need. In the survey the dairy farmers were asked to assess their perception of risk sources and the importance they attached to risk management strategies. Using a 1 to 5 scale, mean scores of both risk sources and management strategies were compared (Z-test) by ownership structure and geographic location. The differences in the perception of risk between sharemilkers and owner-operators were mainly in the sources categorised as "market" and "human". "Changes in land prices" was highly important for sharemilkers. Differences of risk management strategies were noted in the "financial" and "production" categories. The main sources of risk perceived differently by farmers in the North and South Islands were in the production side of the business. Although farmer s from both islands were similarly focused on controlling risk through production management strategies, those from the South Island were keener to use financial responses. In conclusion, sharemilkers were more concerned with the changes of prices of both inputs and outputs than owner-operators. Sharemilkers were more production-orientated to manage risk than farm owners, and they also were more focused on off-farm income and debt management. Differences in both the risk perception and the risk management strategies used in each island are related to differences in farm sizes and the developmental stage of the dairy sector in each island. Keywords: risk perception, risk management strategies, sharemilkers

scholarly journals Risk Management Strategies in Humid Production Regions: A Comparison of Supplemental Irrigation and Crop Insurance

2004 ◽  
Vol 33 (2) ◽  
pp. 220-232 ◽  
Author(s):  
Timothy J. Dalton ◽  
Gregory A. Porter ◽  
Noah G. Winslow
Keyword(s):  
Risk Management ◽  
Crop Production ◽  
Crop Insurance ◽  
Management Strategies ◽  
Economic Feasibility ◽  
Supplemental Irrigation ◽  
Production Risk ◽  
Enterprise Risk ◽  
Risk Management Strategies ◽  
Management Responsibility

Recent federal agricultural programs have accelerated the devolution of enterprise risk management responsibility from the state to individual producers. Using a biophysical simulation model, the risk management benefits of federal crop insurance and supplemental irrigation are derived and compared to uninsured rainfed crop production in an expected utility framework. Federal crop insurance programs are inefficient at reducing producer exposure to weather-related production risk in humid regions, and the risk management benefits from supplemental irrigation are found to be scale and technology dependent. Environmental policies that regulate resource development will increase the investment cost of irrigation alternatives and reduce economic feasibility.

Do Farmers Value Insurance Against Extreme Droughts and Floods? Evidence from Odisha, India

2020 ◽  
pp. 097215092095761
Author(s):  
Asis Kumar Senapati
Keyword(s):  
Risk Aversion ◽  
Crop Insurance ◽  
Management Strategies ◽  
Probit Model ◽  
Insurance Companies ◽  
Agricultural Insurance ◽  
Insurance Product ◽  
Risk Management Strategies ◽  
Willingness To Purchase

Crop insurance provides farmers with financial support and coverage in the event of extreme natural disasters. Despite more than two decades of disseminating the knowledge in India, crop insurance adoption rates remain low with evidence of dis-adoption. This article assesses farm households’ willingness to insure their crops as well as ability to pay for an insurance product designed to help rural Indian farmers manage flood- and drought-associated risks. The objective of this study is to assess the determinants of farmers’ participation in market-based agricultural insurance living in coastal and rainfed areas prone to risky weather. It is hypothesized that crop insurance would lead to less risk-averse behaviour and more efficient use of farm resources. Using probit model, the study highlights several determinants of willingness to insure and empirically verify the role of risk aversion in insurance purchase decisions. The lottery-choice experiment has been applied by the author for evaluating risk attitudes of sample household. Empirical results suggest that as regards farmers’ risk preferences, risk aversion actually plays an important role even though not directly but in interactive terms with expected losses which, in turn, significantly influencing farmers’ willingness to purchase the insurance product. The study underlines significant influence of insurance history on future crop insurance choice decision. Farmers’ insurance purchase history can help insurance companies, in order to devise effective crop insurance programmes in the future. Similarly, the study also foregrounds the significant role of insured amount in insurance contracts, influencing farmers’ crop insurance purchase decision in both rainfed and irrigated regions. It can therefore help insurance companies to revise the contract items or reform the existing subsidies. Finally, the study goes on to recommend the importance of the knowledge of informal risk management strategies followed by farmers before offering them the formal insurance product and the necessity of the insurance companies in understanding the farmers’ behaviour while designing the insurance product.

scholarly journals Analysis of Price Risk Management Strategies in Dairy Farming Using Whole-Farm Simulations

2013 ◽  
Vol 45 (2) ◽  
pp. 313-327 ◽  
Author(s):  
James Neyhard ◽  
Loren Tauer ◽  
Brent Gloy
Keyword(s):  
Risk Management ◽  
Management Strategies ◽  
Farm Income ◽  
Reference Scenario ◽  
Net Income ◽  
Dairy Farmers ◽  
Risk Management Strategies ◽  
Marketing Procedure ◽  
Cash Basis ◽  
Price Risk Management

Combinations of futures and options contracts on milk and feed were simulated to determine their influence on a representative dairy farm's ability to meet cash flow requirements and reduce the variance of net income. Compared with the reference scenario of selling milk and procuring inputs on a monthly cash basis, the risk management activities did not result in a significant change in either the level or variance of net farm income. The results suggest that on average the current marketing procedure of monthly cash milk pricing and monthly feed purchases (and pricing) produces a strong built-in natural hedge for dairy farmers.

The management of risk in a dryland environment

2011 ◽  
pp. 13-21
Author(s):  
D.I. Gray ◽  
J.I. Reid ◽  
D.J. Horne
Keyword(s):  
Risk Management ◽  
Service Providers ◽  
Management Strategies ◽  
Subterranean Clover ◽  
Farming Systems ◽  
Market Risk ◽  
Farm Size ◽  
Forage Crops ◽  
Risk Management Strategies ◽  
Upside Risk

A group of 24 Hawke's Bay hill country farmers are working with service providers to improve the resilience of their farming systems. An important step in the process was to undertake an inventory of their risk management strategies. Farmers were interviewed about their farming systems and risk management strategies and the data was analysed using descriptive statistics. There was considerable variation in the strategies adopted by the farmers to cope with a dryland environment. Importantly, these strategies had to cope with three types of drought and also upside risk (better than expected conditions), and so flexibility was critical. Infra-structure was important in managing a dryland environment. Farmers chose between increased scale (increasing farm size) and geographic dispersion (owning a second property in another location) through to intensification (investing in subdivision, drainage, capital fertiliser, new pasture species). The study identified that there may be scope for further investment in infra-structural elements such as drainage, deeper rooting alternative pasture species and water harvesting, along with improved management of subterranean clover to improve flexibility. Many of the farmers used forage crops and idling capacity (reduced stocking rate) to improve flexibility; others argued that maintaining pasture quality and managing upside risk was a better strategy in a dryland environment. Supplementary feed was an important strategy for some farmers, but its use was limited by contour and machinery constraints. A surprisingly large proportion of farmers run breeding cows, a policy that is much less flexible than trading stock. However, several farmers had improved their flexibility by running a high proportion of trading cattle and buffer mobs of ewe hoggets and trade lambs. To manage market risk, the majority of farmers are selling a large proportion of their lambs prime. Similarly, cattle are either sold prime or store onto the grass market when prices are at a premium. However, market risk associated with the purchase of supplements and grazing was poorly managed.

The Effects of Decision Aid Orientation on Risk Factor Identification and Audit Test Planning

2002 ◽  
Vol 21 (2) ◽  
pp. 39-56 ◽  
Author(s):  
Jean C. Bedard ◽  
Lynford E. Graham
Keyword(s):  
Risk Factors ◽  
Risk Management ◽  
Decision Aid ◽  
Decision Aids ◽  
Management Strategies ◽  
Risk Identification ◽  
Matched Pair ◽  
Audit Planning ◽  
Audit Firms ◽  
Risk Management Strategies

In auditing, risk management involves identifying client facts or issues that may affect engagement risk, and planning evidence-gathering strategies accordingly. The purpose of this paper is to examine whether auditors' identification of risk factors and planning of audit tests is affected by decision aid orientation, i.e., a “negative” focus wherein client risk and its consequences are emphasized, or a “positive” focus where such factors are not emphasized. Specifically, we expect that auditors will identify more risk factors using a negatively oriented risk identification decision aid, but only when engagement risk is relatively high. We address this issue in the context of auditors' knowledge of actual clients, manipulating decision aid orientation as negative or positive in a matched-pair design. Results show that auditors using the negative decision aid orientation identify more risk factors than do those using a positive orientation, for their higher-risk clients. We also find that decisions to apply substantive tests are more directly linked to specific risk factors identified than to direct risk assessments. Further, our results show that auditors with repeat engagement experience with the client identify more risk factors. The findings of this study imply that audit firms may improve their risk management strategies through simple changes in the design of decision aids used to support audit planning.

scholarly journals Evaluation of Physical Risk during Necropsy and Morgue Activities as Risk Management Strategy

2021 ◽  
Vol 18 (16) ◽  
pp. 8266
Author(s):  
Zoe Del Fante ◽  
Nicola Di Fazio ◽  
Adriano Papale ◽  
Paola Tomao ◽  
Fabio Del Duca ◽  
...  
Keyword(s):  
Risk Factors ◽  
Risk Management ◽  
Management Strategies ◽  
Risk Management Strategy ◽  
Work Related ◽  
Activity Measurements ◽  
Risk Management Strategies ◽  
Physical Risk ◽  
Critical Issues ◽  
Load Handling

Physical risk assessments allow us to understand work-related critical issues, thus representing a useful tool in risk management strategies. In particular, our study focuses on the identification of already known and emerging physical risks related to necropsy and morgue activities, as well as crime scene investigations. The aim of our study is, therefore, to identify objective elements in order to quantify exposure to such risk factors among healthcare professionals and working personnel. For the research of potentially at-risk activities, data from the Morgue of Policlinico Umberto I Hospital in Rome were used. The scientific literature has been reviewed in order to assess the risks associated with morgue activity. Measurements were performed on previously scheduled days, in collaboration with the activities of different research units. The identified areas of risk were: microclimate; exposure to noise and vibrations; postural and biomechanical aspects of necropsy activities. The obtained results make it possible to detect interindividual variability in exposure to many of the aforementioned risk factors. In particular, the assessment of microclimate did not show significant results. On the contrary, exposure to vibrations and biomechanical aspects of load handling have shown potential risk profiles. For this reason, both profiles have been identified as possible action targets for risk management strategies.

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