Risks management studies in the agri-food sector predominately focus on the technical methods and the capability to perceive, prevent, mitigate, and recover from diverse risks. In most economic publications the risks are usually studied as other commodity regulated by the market supply and demand, and the farmers “willingness to pay” for an insurance contract modeled. At the same time, the risk management analysis largely ignore a significant “human nature” based (bounded rationality, opportunism) risk, critical factors for the managerial choice such as the institutional environment and the transaction costs, and diversity of alternative (market, private, collective, public, hybrid) modes of risk management. This paper incorporates the interdisciplinary New Institutional Economics and presents a comprehensive framework for analyzing the risk management in the agri-food sector. First, it specifies the diverse (natural, technical, behavioral, economic, policy etc.) type of agri-food risks, and the (market, private, public and hybrid) modes of their management. Second, it defines the efficiency of risk management and identifies (personal, institutional, dimensional, technological, natural) factors of governance choice. Third, it presents stages in the analysis of risk management and for the improvement of public intervention in the risk governance. Forth, it identifies the contemporary opportunities and challenges for the risk governance in the agri-food chain. Finally, it identifies, and assesses the efficiency and prospects of major modes for risk governance in the Bulgarian dairy sector.
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