Agricultural risk and risk management strategies (აგრარული რისკების შეფასება და მათი დაძლევის სტრატეგიები)
Loading...
Date
2021
Journal Title
Journal ISSN
Volume Title
Publisher
Ivane Javakhishvili Tbilisi State University Press
Abstract
Improving agricultural efficiency in a diverse agricultural landscape and
developing new risk management tools are critical to the viability and sustainability
of the sector. In addition to traditional risks, farmers face challenges from climate
change, market expansion, rapid price changes and globalisation. The current
pandemic and the pandemic crisis have shown the importance of a holistic
approach to agricultural risk management. The article gives a systematisation of
the risks for the farmer and presents the mechanisms for assessing and managing
them. Risks are divided into 2 broad groups according to their origin - internal and
external risks. Internal risks include production, human resources, financial and
physical risks, while farming is independently affected by political, market, price
and other agriculture-related risks. Risk identification is the first stage of risk
management, followed by the stages of risk assessment, risk management and
risk control. In practice, these stages are not part of a strictly coherent process,
but are constantly interconnected.
The aim of risk assessment is to map the individual risks of the company as
accurately as possible in order to be able to carry out appropriate risk management
activities. There are many qualitative and quantitative methods for this. The
economic significance of risks can be assessed using a risk matrix in which risks
are represented by their probability of occurrence and amount of damage, and 4
different methods for managing them are considered in the following stage: Risk
avoidance, risk mitigation, risk transfer and risk assumption.
At the end of the article, the complicated situation of farms in Georgia and
the role of appropriate risk management to remedy the situation are discussed.
The experience gained in developing and developed countries of the world is
also interesting and useful information for Georgian farmers on effective risk
management mechanisms.
Description
• Berg E. (2005). Integriertes Risikomenejment: Notwendigkait und Konzepte fuer
die Landwirtschaft. [Integrated Risk Management: Necessity and Concepts for Agriculture.
In: Deitmer J. (Ed.): Agricultural Economics in Transition. ILB Press, Bonn.]
in German.
• Brown K. (2021). What Is the Difference Between “Hazard” And “Risk”? https://www.
rrp.com.au/what-is-the-difference-between-the-terms-hazard-and-risk/ Last
seen July 20, 2021.
• Frentrup M., Heyder M., & Theuvsen L. (2012). Risikomenejment in der Landwirtschaft;
Leitfaden fuer Landwirte: So behalten Sie die Risiken im Griff. [Risk
Management in Agriculture; Farmers’ Guide: how to Keep Risks under Control. Edmund
Rehwinkel Foundation]. in German.
• Hambrusc J., Heinschink K., & Tribl C. (2020). Risiken und Risikomenejment in der
Landwirtschaft Österreichs-Eine Unterlage für LandwirtInnen und BeraterInnen.
[Risks and Risk Management in Austrian Agriculture-A document for farmers and
advisors. Bundesanstalt für Agrarwirtschaft und Bergbauernfragen; Vienna] www.
bab.gv.at in German.
• Hirschauer N., & Mußhoff O. (2012). Risikomenejment in der Landwirtschaft. [Risk
Management in Agriculture.] Erling Verlag (February 2, 2012). ISBN-10 3862630749.
in German.
• Jain R., & Parshad M. (2012). Report of the Working Group in Risk Management in
Agriculture - Government of India Planning Commission New Delhi. https://niti.
gov.in/planningcommission.gov.in/docs/aboutus/committee/wrkgrp11/wg11_
risk.pdf Last seen June 19, 2021.
• Keller J. (2010). Ernteversicherungen als Risikomenejment instrument - Eine Analyse
von Versicherungstypen und Tarifierungsmodellen [Crop Insurance as a Risk
Management Tool - An Analysis of insurance Types and Pricing Models - Thesis,
Justus Liebig University Giessen]. in German.
• Kimura S., Antón J., Lethi C. (2010). Farm Level Analysis of Risk and Risk Management
Strategies and Policies CROSS COUNTRY ANALYSIS. https://doi.org/10.1787/5kmd-
6b5rl5kd-en Last seen June 27, 2021.
• Laschewski L., & Pessier H.-J. (2008). Risikorechnung in landwirtschaftlichen
Großbetrieben in den Neuen Bundesländern. [Risk Calculation in Large-Scale Agricultural
Enterprises in the Former East Germany. Publication series volume 23].
in German.
• Lehrner J. (2002). Notwendigkeit, Nutzen und Realisierbarkeit eines Risiko-Menejment
in landwirtschaftlichen Betrieben. [Necessity, Benefits and Feasibility of Risk
Management in Agricultural Enterprises. Diss. WU Vienna]. in German.
• Meyer R., Kalwait R., Romeike F., & Schellenberger O. (2008). Risikomenejment
in der Unternehmensführung. [Risk Management in Corporate Governance. Wiley-
VCH, Weinheim]. in German.
• Mußhoff O., & Hirschauer N. (2016). Modernes Agrarmenejment betriebswirtschaftliche
Analyse- und Planungsverfahren. [Modern Agricultural Management Business
Analysis and Planning Methods (Vol. 571). Verlag Franz Vahlen GmbH]. in German.
• Näther M., & Theuvsen L. (2012). Risikomenejment Leitfaden für Pferdebetriebe: So
behalten Sie die Risiken im Griff. [Risk Management Guide for Horse Farms: How to
Keep Risks under Control. Edmund Rehwinkel Foundation]. in German.
• Schaper C., Bronsema H., & Theuvsen L. (2012). Farm Risk Management in Agriculture
- an Empirical Analysis in Saxony, Saxony-Anhalt, Thuringia and Mecklenburg-
Western Pomerania.
• Schaper C., Wocken C., Abeln K., Lassen B., Schierenbeck S., Prof. Dr. Spiller A.,
Dr. Theuvsen L. (2008). Risikomenejment in Milchviehbetrieben: Eine empirische
Analyse vor dem Hintergrund der sich ändernden EU Milchmarktpolitik [Risk Management
in Dairy Farms: An Empirical Analysis in the Light of Changing EU Dairy
Market Policy.] www.rentenbank.de in German.
• Weber R., Kraus T., Prof. Dr. Mußhoff O., Prof. Dr. Odening Martin, & Dr. Rust I. (2008).
Risikomenejment mit indexbasierten Wetterversicherungen – Bedarfsgerechte
Ausgestaltung und Zahlungsbereitschaft [Risk Management with Index-Based
Weather Insurance - Needs-Based Design and Willingness to Pay. Schriftenreihe
Vol. 23]. in German.
• Wolke T. (2008). Risikomenejment [Risk Management (German Edition). Oldenbourg
Wissenschaftsverlag]. in German.
• Aladashvili g. (2021). Ratom ixureba saqartveloshi ert-erti kvelaze didi ferma? Radio
Tavisufleba https://bit.ly/2T3pq5x Last seen July 5, 2021 [Aladashvili G. (2021).
Why is One of the Largest Farms in Georgia closing? Radio Liberty https://bit.ly/2T-
3pq5x Last seen July 5, 2021]. In Georgian.
• Labadze l. (2015). sakartvelos soplis meurneobashi investitsiebis epektianobis
shepaseba mikroekonomikuli modelit. sadisertatsio nashromi, tbilisis sakhelmtsipo
universiteti, ekonomikisa da biznesis pakulteti. [Labadze L. (2015). Evaluating
the Efficiency of Investments in Georgia’s Agriculture Using a Microeconomic
Model. Dissertation, Tbilisi State University, Faculty of Economics and Business].
in Georgian.
Keywords
Agribusiness, agrarian risks, risk management in agriculture, climate change
Citation
Economics and Business, №3, 2021, pp. 68-86