Agriculture is a high-risk proposing sector. Scientists are doing multiple surveys aiming to identify ways in which agricultural producers tend to manage their risks. The opinion of the Lithuanian agricultural producers on the risks incurred and risk management methods used has not yet been investigated. Due to Lithuanian agricultural entities’ high dependence on the viability of deriving support it is important to investigate what risk factors are relevant to them. All of the threats cannot be managed due to various limitations. Ranking of risk factors according to their importance for country agricultural producers will enable more effective risk management techniques, which will allow the increase of competitiveness and the viability of the holdings as well as reduction of their dependence on support.
The goal of this study is to evaluate the importance of the risk factors for agricultural producers in the country and to propose support measures for agricultural production in order to avoid or reduce the negatyve effects of risk factors. The object of this study is the opinion of Lithuanian agricultural producers about their risks. In order to perform an analysis of the risk factors disclosed in the literature a questionnaire was prepared, as well as grouping model of risk factors. A questionnaire-based survey resulted ranking of the risk factors faced by country agricultural producers.
Results of the study confirmed the hypothesis that the most important risk factors for the Lithuanian agricultural producers were unpredictability of natural phenomena and the use of natural resources. The average rank importance of these factors is the highest - group’s average rank is 20.2. The biggest concern for agricultural producers is the suitability, availability and accessibility of the land resources (the rank of importance is 23.7). While many economists refer to the unpredictability of the weather as the most important risk factor, according to the respondents, the importance of this risk factor, although high, but scored lower (the rank of importance of a 19.5) than the risk on land resources. Respondents expressed opinion suggested that the agricultural land market must be strictly regulated by the State. Land drainage schemes and other measures to improve the quality of the support mechanism have not been effective.
The importance of the external risk factors related to human activities is also high - the group’s average rank is 15.7. The legal environment (rank of importance - 22.0) - second in importance among all analyzed risk factors. This shows that the existing laws and regulations, although continuously improved, are not accurate enough to reflect the interests of agriculture producers.
The lowest risk arises from the internal environmental risk factors (average rank of 10.7). It can be concluded that farmers rely on their own ability to farm.
It is important to install a more differentiated approach to the farm in forming of the support policy of agricultural production and the provision of financing or insurance, because farms of varying size and activity are faced with different challenges.
Most respondents expressed positive attitude towards risk management options. This states that the support (training, guidelines) to farmers in the field of risk management is important and relevant. Since the respondents discern a serious threat on the external risk factors, it is important to focus on the risk management methods, such as forecasting, strategic management and operational planning, in the training of farmers.
JEL CODES: Q12, Q14, Q15, Q18
KEY WORDS: agricultural support measures, risk factors
Kozlovskaja, A. 2014. Rizikos veiksnių aktualumas Lietuvos žemės ūkio produktų gamintojams, Regional formation and development studies 12(1):157-170. http://dx.doi.org/10.15181/rfds.v12i1.693 ISSN 2351-6542.
Scentific Publications: Relevance of risk factor s for Lithuanian agricultural producers (in Lithuanian language)