9 - Describe the major sources of supply base risk.... Ch. A part of risk management is a determination of risk versus reward. (13, 18) Approximately 45 per cent of the total farming area in Thailand is located in this region. Hall, Knight, Coble, Baquet and Patrick found severe drought and meat price variability as the primary sources of risk perceived amongst cattle farmers in Texas and Nebraska. Crop insurance is, theoretically, an efficient instrument in managing risks and can facilitate efforts to protect farmers from either the loss of their crops or farm income caused by natural disasters or drops in commodity prices. North-east farmers perceived the importance of these two production strategies higher than central region farmers. Risk & Safety Management Typical Risk Sources. Pellegrino studied rice farmers’ perceptions of the sources of risk and risk management responses in Argentina. In addition to the prices of chemical fertilizer, the increase in wage rates and higher land rental rates are the main factors that pushed the farm production costs upward. As PhD students, we found it difficult to access the research we needed, so we decided to create a new Open Access publisher that levels the playing field for scientists across the world. Help us write another book on this subject and reach those readers. In 2007, the average monthly income per farm in this region is 15,271 baht. Building this type of culture is a different process for every organiza… Factors AS1‐6 can be labelled in accordance with the significant loading variables that were obtained for each factor and explained as follows: Factor AS1: this factor is named ‘economic and political’ because of the relatively high loadings on the sources of risk variables with the changes in Thailand and the world economic and political situations and changes in the government laws and policies that affected the small farm operations. There is much literature on risk sources that impact farming operations and their risk management strategies. Mustafa argued that the educational level of farmers affected their decision making capacity. Without much knowledge in risk management, a project manager cannot plan accordingly. Knowledge risks map (source: Durst & Zieba 2018). As part of this process you must look at the following sources: Sources Description Risk registers and risk reports Provide a foundation for evaluating existing risks and their potential risk to an objective. General Risks Nearly half of the farmers in the north-east had been involved in agricultural work for over 40 years which implies that younger farmers are rare especially in the north-east. (1, 2) Farmers confront a variety of yields, unstable output and input prices and radical changes in production technology as inherent in their farming operations. Risks related to the ‘economic and political’ and ‘personal and farm business environment’ were perceived as highly important by farmers who had off-farm work. Table 3 summarizes the results of the most important perceived sources of risk for the farmers in the central and north-east regions. These relationships may be due to the farmers who have off-farm work to enhance their farm income; they are willing to adopt such strategies to improve and maintain their farm income. (35-37) The advantage of the rice pledging scheme is that farmers can obtain low-interest loans from the government when they decided to pledge their rice to the Bank of Agriculture and Agricultural Cooperatives (BAAC) at the pledging prices and the rice will be transferred to storage at the Public Warehouse Organisation. Factor AS3 is labelled ‘natural disaster’. Hence, risk identification can start with the source of problems, or with the problem itself. Factor three (AR3): this factor is loaded highly on ‘investing in non-farm investment/business’ and ‘working off farm to supplement net farm income’, which represent the influence of off-farm income. Strategic risk is multidimensional while tactical risk has an identifiable one-to-one exposure such as price risk to futures contract (i.e. Boggess, Anaman, and Hanson examined farmers’ awareness of risk in crop and livestock production in northern Florida and southern Alabama. Nearly 50 per cent of the farmers had small debts. (24), Ranking of perceptions of sources of risk by sampled farmers in central and north-east Thailand, The survey results showed that the uncertainty of input prices and product prices have become increasingly worrying among smallholder farmers in the central and north-east regions. ‘Use forward contracts’ was the least important marketing strategy considered by most central and north-east regions farmers. The sources of risk and their preferred risk management strategies are obtained from face-to-face interviews of 800 farmers, 400 each in the central and northeast regions of Thailand. Following this incident, 100,000 rai (16,000 ha.) (39) Some economists also suggested that the government should discontinue this highly-interventional price policy and should encourage farmers to sell their products using futures contracts to reduce the risk of price and income volatilities. Similarly, the average prices of the major farm inputs such as fertilizer NPK 16-20-0, which is widely used by rice farmers, fluctuated from 9,485 baht/tonne in 2006 to a peak of 19,386 baht/tonne in 2008 and then dropped to 16,199 baht/tonne in 2009. The highest educational level was positively related to the ‘farm production and marketing management’, ‘diversification’ and ‘off-farm income’ risk strategies. This indicates that the north-east farmers were confronted with the variability of input prices and severe droughts. Approximately 60 per cent of the farmers in both regions reported that they used these two financial strategies. The results for the average net farm income between the farmers in the central and north-east regions were statistically significant at the one per cent level. The central region has a farming area of 8.61 million acres or 19.2 per cent of the total farming area. Production and financial strategies were considered more important managerial responses to risk than marketing strategies by the farmers in both regions. In addition, farm business finance is positively related to the ‘natural disaster’ risk factor. Once a risk’s been identified, it is then easy to mitigate it. After establishing the context, the next step in the process of managing risk is to identify potential risks. Our readership spans scientists, professors, researchers, librarians, and students, as well as business professionals. The SDs of both sources of risk in each group were less than one and this indicates that those sources of risk gained a high level of consensus among the farmers in both regions. Flaten et al. There are five main sources of risk in an agricultural operation: production risk, marketing risk, financial risk, legal risk, and human resource risks. Sources of Risk in Business Investment:- If we talk only about return on investment without talking about the risk on investment, it will not be sensible. Identifying risk categories aids the future consolidation of activities in risk mitigation plans. states that “the welfare of the farm family and the survival of farm business may depend on how well farming risks are managed”.(1). Among the production strategies perceived by the central region farmers, ‘purchase farm machinery to replace labour’ was the most important with an average rating of 3.45. 1: List the Potential Sources of Construction Risk. Varimax rotated factor loadings of sources of risk for all sampled in Thailand farmers (n=800). Similarly, the costs of farm inputs also vary each year and may negatively affect farm production costs. In addition, eight per cent of the farmers used their own savings to operate their farm business. Therefore, the ‘use forward contracts’ variable was deleted from factor AR3 and the Cronbach Alpha coefficient slightly improved from 0.642 to 0.697. (13) The annual rainfall fluctuates widely each year, and pests, diseases and poor soil fertility affect the yields of cash crops in Thailand. This finding revealed that smallholder farmers were concerned about the effect of the political conflicts in Thailand on their farm operation. For several decades, agricultural production in Thailand has faced many risks such as variability in yields, product-prices and cost of inputs. Available from: Sources of risk and risk management strategies on farm, Diseases and pests that affect plants and animals, Changes in Thailand’s economic and political situation, Changes in national government laws and policies, Natural disasters such as heat, fire, flood, storm, Changes in the world economic and political situation. The summated scales of sources of risk and risk strategy factors of each group of farmers were summed up and averaged based on the relevant variables in each factor structure and their internal consistency. Corporate risk management. From our experience, there are two major types of workplace culture. This finding supports Limsombunchai, who argued that smallholder farmers in rural Thailand lacked investment funds due to a credit accessibility barrier.(31). Before performing multiple regression analysis, all models were assessed for normality, linearity, multicollinearity and homoscedasticity to ensure the appropriateness of the equations.(29). (22) A total of 149 farmers in 12 states were interviewed. The table shows that marketing risks associated with ‘unexpected variability of input prices’ and ‘unexpected variability of product prices’ had the highest and second highest mean scores for sources risk, respectively rated by the farmers in both regions. These affect the fluctuation in farm profitability from season to season and from one year to another. (16) Thai farmers are basically smallholders and the national farm size is approximately 7.72 acres. Risk sources identify where risks can originate. This suggests that less experienced farmers were more likely to be interested in employing these strategies to manage risk on their farms than the more experienced farmers. The results indicated that the lack of farm resources may affect the diversification performance of the farmers in both groups. It should be noted that farm size is one of the constraints to diversification, that is, farmers with a small holding have limited ability to diversify their farm activities.(33). In this guide, I’d like to discuss the categories we use in that checklist. A crisis often occurs when it is least expected, so it is important to have a Risk Management Plan in place that establishes the steps to be taken in the case of a crisis. This suggests that the farmers who have a lower net farm income believe that these risk strategies can help to increase their farm income. (1, 7) Business risks can be classified further into a) production or yield risk, b) marketing or price risk, c) institution, policy, and legal risk, d) human or personal risk, and e) technological risk. This may imply that farmers in the north-east region perceived these risk strategies as more important than the central region farmers. When a business evaluates its plan for handling pot… Livestock price and weather variability and livestock diseases were perceived as important sources of risk for livestock production. Thus, factor three is named ‘off-farm income’. The findings support Martin, who argued that the farmers’ selection criteria for risk management strategies varied depending on farm type, climatic conditions, marketing factors and agricultural rules and regulations.(23). This observation proves that there is no universal methodology for managing this risk. The development of a national agricultural crop insurance scheme should be one of the Thai government’s priorities. Farmers in both regions perceived ‘unexpected variability of input prices’ as the most important sources of risk on the farm. Risks management is an important process because it empowers a business with the necessary tools so that it can adequately identify potential risks. Unhealthy concentrations that make a company vulnerable to the loss of a business keystone—a major customer, a uniquely skilled employee, a custom machine, or a single raw material supplier. (19) On the other hand, New Zealand farmers used a mix of risk management strategies to reduce risk. The household and farm characteristics of the central and north-east region farmers are presented in Table 1. A nationwide mail survey was used to examine the sources of risk and the risk management strategies of New Zealand farmers by Martin(23). Risk in agriculture is pervasive and complex, especially in agricultural production. (42) The government expects this crop insurance scheme will continue to develop to cover all farmers and crops countrywide in the near future. These threats, or risks, could stem from a wide variety of sources, including financial uncertainty, legal liabilities, strategic management errors, accidents and natural disasters. The relationships between the socioeconomic variables and the perception of risk sources and risk management strategies of the smallholder farmers were also analyzed. The KMO index varies from 0 to 1, with results of 0.6 or greater suitable for factor analysis. The findings from the survey revealed that the smallholder farmers in both regions used a mix of risk strategies to manage and reduce the sources of risk they are confronted with. First, exploratory factor analysis (EFA) was used to capture the information on the interrelationships among the set of variables. Risks are about events that, when triggered, will cause problems. 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