Title
Risk perception, attitudes towards risk and risk management: evidence and implications
Author
Faculty/Department
Faculty of Pharmaceutical, Biomedical and Veterinary Sciences. Veterinary Sciences
Publication type
article
Publication
Prague [République tchèque] :Czech Academy of Agricultural Sciences, Institute of Agricultural and Food Information ,
Subject
Economics
Biology
Source (journal)
Agricultural Economics = Zemedelska Ekonomika. - Prague [République tchèque]
Volume/pages
60(2014) :9 , p. 389-405
ISSN
0139-570X
ISI
000345187900001
Carrier
E
Target language
English (eng)
Affiliation
University of Antwerp
Abstract
The comprehensive risk analysis of a business such as farming entails questions on what is at stake, how important is the risk concern and how to deal with it. We performed a sequential mixed method, with the in-depth interviews in the first stage (n = 35), followed by a survey on the Flemish FADN (n = 614) in the second, to investigate the farmers' risk perception, the attitudes towards risk and the perceived usefulness of the risk management strategies. We find that, rather than the short-term volatility in prices, the longer term co-evolution of expenses versus receipts is of a major concern to farmers, next to the land availability and the policy risks. Farmers are shown to be only slightly risk averse, rather risk neutral even. Further, our results suggest that farmers do not consider extensively studied risk management strategies such as contracts, futures and insurances, a valid option for their farm, and put more faith in internal strategies such as the debt management, the liquidity management and diversification. Last, risk management is to a substantial degree performed at the household level, rather than at the farm level, with strategies such as cutting the private expenses and the off-farm employment. These results hardly differ according to the farm and farmer characteristics.
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