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Perceptions Of Risks And Risk Management Strategies; An Analysis Of Dutch Livestock Farmers

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  • Meuwissen, Miranda P.M.
  • Huirne, Ruud B.M.
  • Hardaker, J. Brian

Abstract

The risk environment of farmers is changing and new risk management strategies are being introduced. Beal (1996) stated that risk management strategies adopted by farmers will be in accordance with their personal preferences for risk. In this context it would be useful for developers and sellers of new risk management strategies to have insight into farmers' preferences for risk. This paper studies to what extent such preferences are farmer-specific or whether general relationships exist. By means of a large questionnaire survey among 2700 livestock farmers in the Netherlands we gathered data on four groups of variables, i.e. socioeconomic characteristics of the farm, farmers' attitudes towards risk, their perceptions of sources of risk, and their perceptions of risk management strategies. Various techniques of multivariate data analyses have been used to analyse the relationships between these groups of variables. Many significant relationships were found (although not to a great extent for attitudes towards risk). However, we are cautious in recommending that new risk management strategies need to be fully fine-tuned to aspects analysed in this study. Low values of the adjusted R-squared indicate that there are still other (possibly even more personal) aspects that determine the final perception of a farmer of a risk management instrument. In addition, results of this study reflect farmers' perceptions of risk management strategies, which is not necessarily the same as the extent to which they would actually use such strategies.

Suggested Citation

  • Meuwissen, Miranda P.M. & Huirne, Ruud B.M. & Hardaker, J. Brian, 1999. "Perceptions Of Risks And Risk Management Strategies; An Analysis Of Dutch Livestock Farmers," 1999 Annual meeting, August 8-11, Nashville, TN 21507, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea99:21507
    DOI: 10.22004/ag.econ.21507
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    References listed on IDEAS

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    1. Goodwin, Barry K. & Ker, Alan P., 1998. "Revenue Insurance: A New Dimension in Risk Management," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 13(4), pages 1-4.
    2. Patrick, George R. & Wilson, Paul N. & Barry, Peter J. & Boggess, William G. & Young, Douglas L., 1985. "Risk Perceptions and Management Responses: Producer-Generated Hypotheses For Risk Modeling," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 17(2), pages 231-238, December.
    3. Skees, Jerry R. & Harwood, Joy L. & Somwaru, Agapi & Perry, Janet E., 1998. "The Potential For Revenue Insurance Policies In The South," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 30(1), pages 1-15, July.
    4. Boggess, William G. & Anaman, Kwabena A. & Hanson, Gregory D., 1985. "Importance, Causes, and Management Responses to Farm Risks: Evidence From Florida and Alabama," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 17(2), pages 105-116, December.
    5. Boggess, William G. & Anaman, Kwabena A. & Hanson, Gregory D., 1985. "Importance, Causes, And Management Responses To Farm Risks: Evidence From Florida And Alabama," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 17(2), pages 1-12, December.
    6. Patrick, George F. & Wilson, Paul N. & Barry, Peter J. & Boggess, William G. & Young, Douglas L., 1985. "Risk Perceptions And Management Responses: Producer-Generated Hypotheses For Risk Modeling," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 17(2), pages 1-8, December.
    7. Beal, Diana J., 1996. "Emerging Issues in Risk Management in Farm Firms," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 64(03), pages 1-12, December.
    8. Steven C. Blank, 1995. "The new risk environment in California agriculture," Agribusiness, John Wiley & Sons, Ltd., vol. 11(2), pages 155-168.
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    Cited by:

    1. Meuwissen, Miranda P.M. & Skees, Jerry R. & Black, J. Roy & Huirne, Ruud B.M. & Dijkhuizen, Aalt A., 2000. "An Analytical Framework For Discussing Farm Business Interruption Insurance For Classical Swine Fever," 2000 Annual meeting, July 30-August 2, Tampa, FL 21738, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Christian Schaper & Ludwig Theuvsen & Achim Spiller, 2010. "Risikoneigung und Risikoverhalten von Milch-erzeugern: Eine Typologisierung," Journal of Socio-Economics in Agriculture (Until 2015: Yearbook of Socioeconomics in Agriculture), Swiss Society for Agricultural Economics and Rural Sociology, vol. 3(1), pages 157-193.
    3. Hailu, Getu & Jeffrey, Scott R. & Goddard, Ellen W., 2004. "Impact Of Decision Makers Divergence In Risk Attitudes And Perceptions On Co-Operative Management In Canada," 2004 Annual meeting, August 1-4, Denver, CO 20246, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Bardhan, D. & Tewari, S.K., 2007. "Risk Attitude and Risk Management Strategies: An Analysis of Dairy Farmers in Tarai Area of Uttaranchal State," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 62(4), pages 1-16.

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