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Type: Journal article
Title: Risk management strategies by Australian farmers: two case studies
Author: Nguyen, N.
Wegener, M.
Russell, I.
Coventry, D.
Cooper, I.
Citation: AFBM Journal, 2007; 4(1 & 2):23-30
Publisher: Charles Sturt University, Australian Farm Business Management Network
Issue Date: 2007
ISSN: 1449-5937
Statement of
Nam C Nguyen, M Wegener, I Russell, D Cameron, D Coventry, and I Cooper
Abstract: Australian farmers operate in one of the most risky farming environments in the world. They have to cope with numerous sources of risk including weather uncertainty, variable market prices, and institutional changes in their business management. This paper reports results from two case studies undertaken to examine the issues of farming risks and risk management strategies in Australia. The first case study found that unpredictable weather, financial risk, marketing risk, and personal risk were regarded as the major sources of risk among farmers in the Upper Eyre Peninsula of South Australia. The main risk management strategies used by farmers in that region included diversifying crop varieties, adopting minimum tillage farming practices, minimising the area of risky crops and maximising the area of less-risky crops. They also regarded high equity, having farm management deposits, and other off-farm investments as appropriate risk management strategies, and mostly 'left marketing to the experts'. The second case study among dryland cropping farmers in southwest Queensland revealed that weather uncertainty was ranked as the most important source of risk in farming in that area. The risk from weather uncertainty was then followed by financial risks, government policy, and marketing risks. The main risk management strategies used by farmers in that area were enterprise diversification, moisture conserving farming practices and using zero till planting, planting at the optimal time, selling only part of the farm's production at any one time, and investing off-farm. The paper compares the results from these two case studies with results from other studies in the United States of America, Canada, Netherlands, and New Zealand.
Keywords: farming risks; sources of risk; management strategies; dryland farmers; Australia
Rights: © Copyright Charles Sturt University
RMID: 0020121214
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Appears in Collections:Business School publications

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