Rethinking farmers' intended risk behaviour : the role of risk perception, risk attitude and decision context

Farming is inherently risky and farmers cope with uncertainty in prices, production policy and the financial situation on the farm. Risk management becomes more pertinent because of ongoing evolutions such as climate change, liberalization and globalization of markets and a changing European agricultural policy. The doctoral dissertation starts from an identified gap between the way risk in agriculture is studied in the scientific literature and the manner in which farmers actually cope with risk. Traditional models assume that general innate risk attitude has a central role in the explanation of risk behaviour. Risk attitude is then to be understood as the individual perspective on the acceptability of risk. However, risk attitude is not stable over a variety of situations, but differs with the type of risk and the risk context. The research described in this doctoral dissertation seeks alternative methods to study actual farmers’ risk coping. Central to the doctoral research is the role of the perception of risk and how it interacts with risk attitude and the decision context to affect the intention to take or avoid risk. Risk does not exist independently of our beliefs and judgement. Therefore, the individual experience of risk, or risk perception, must be considered, rather than objective risk in explaining risk behaviour. Risk perception can focus on the source of risk or the impact of risk. The perception of the impact of risk determines the risk behaviour. Moreover, the intention to take or avoid risk strongly depends on the context in which the risk is embedded, even when the risk itself does not change. This doctoral dissertation proposes methods that can elucidate and present the true risk perception of farmers and that can clarify the role of the decision context in the choice to take or avoid risk

Farm household risk balancing : implications for policy from an EU perspective

Purpose - Building on the risk balancing theory and on recent discussions the appropriateness of using farm income maximization as behavioural assumption, this paper extends the risk balancing framework by accounting for business-household interactions. The purpose of this paper is to theoretically introduce the concept of farm household risk balancing, a theoretical framework in which the farm household sets a constraint on the total household-level risk and balances farm-level and off-farm-level risk. Design/methodology/approach - The paper argues that the risk behaviour of farmers is better understood by considering risk at the household level. Using an analytical framework, equations are derived linking the farm activities, off-farm activities, consumption and business and private liquidity. Findings - The framework shows that a farm household that wants to minimize the risk that total household cash flow falls below consumption needs, may exhibit a wide variety of behavioural responses to changes in the policy and economic environment. Social implications - The framework suggests multiple ways for policy makers and individual farmers to support risk management. Originality/value - Risk management is at the core of the agricultural policy and it is of paramount importance to be able to understand behavioural responses to market and policy instruments. This paper contributes to that by suggesting that the focus of current risk analysis and management studies may be too narrowly focused at the farm level

Recreational sea fishing in Europe in a global contextParticipation rates, fishing effort, expenditure, and implications for monitoring and assessment

Marine recreational fishing (MRF) is a high-participation activity with large economic value and social benefits globally, and it impacts on some fish stocks. Although reporting MRF catches is a European Union legislative requirement, estimates are only available for some countries. Here, data on numbers of fishers, participation rates, days fished, expenditures, and catches of two widely targeted species were synthesized to provide European estimates of MRF and placed in the global context. Uncertainty assessment was not possible due to incomplete knowledge of error distributions; instead, a semi-quantitative bias assessment was made. There were an estimated 8.7 million European recreational sea fishers corresponding to a participation rate of 1.6%. An estimated 77.6 million days were fished, and expenditure was Euro5.9 billion annually. There were higher participation, numbers of fishers, days fished and expenditure in the Atlantic than the Mediterranean, but the Mediterranean estimates were generally less robust. Comparisons with other regions showed that European MRF participation rates and expenditure were in the mid-range, with higher participation in Oceania and the United States, higher expenditure in the United States, and lower participation and expenditure in South America and Africa. For both northern European sea bass (Dicentrarchus labrax, Moronidae) and western Baltic cod (Gadus morhua, Gadidae) stocks, MRF represented 27% of the total removals. This study highlights the importance of MRF and the need for bespoke, regular and statistically sound data collection to underpin European fisheries management. Solutions are proposed for future MRF data collection in Europe and other regions to support sustainable fisheries management.Institut Francais de Recherche pour l'Exploitation de la Mer; French Ministry of Fisheries Management; Greek National Data Collection Programme; European Commission, Data Collection Framework; Department for Environment, Food and Rural Affairs [MF1221, MF1230, MI001]; Norges Forskningsrad [267808]; State Department of Agriculture, Food Security and Fisheries Mecklenburg-Western Pomerania; Interreg IVa 2 Seas; Dutch Ministry of Economic Affairs; European Fishery Fund; Government of Galicia [ED481B2014/034-0

Risk perception, attitudes towards risk and risk management: evidence and implications

Th e comprehensive risk analysis of a business such as farming entails questions on what is at stake, how important is the risk concern and how to deal with it. We performed a sequential mixed method, with the in-depth interviews in the fi rst stage (n = 35), followed by a survey on the Flemish FADN (n = 614) in the second, to investigate the farmers’ risk perception, the attitudes towards risk and the perceived usefulness of the risk management strategies. We fi nd that, rather than the short-term volatility in prices, the longer term co-evolution of expenses versus receipts is of a major concern to farmers, next to the land availability and the policy risks. Farmers are shown to be only slightly risk averse, rather risk neutral even. Further, our results suggest that farmers do not consider extensively studied risk management strategies such as contracts, futures and insurances, a valid option for their farm, and put more faith in internal strategies such as the debt management, the liquidity management and diversification. Last, risk management is to a substantial degree performed at the household level, rather than at the farm level, with strategies such as cutting the private expenses and the off -farm employment. These results hardly diff er according to the farm and farmer characteristics.status: publishe

Risk perception, attitudes towards risk and risk management : evidence and implications

The comprehensive risk analysis of a business such as farming entails questions on what is at stake, how important is the risk concern and how to deal with it. We performed a sequential mixed method, with the in-depth interviews in the first stage (n = 35), followed by a survey on the Flemish FADN (n = 614) in the second, to investigate the farmers' risk perception, the attitudes towards risk and the perceived usefulness of the risk management strategies. We find that, rather than the short-term volatility in prices, the longer term co-evolution of expenses versus receipts is of a major concern to farmers, next to the land availability and the policy risks. Farmers are shown to be only slightly risk averse, rather risk neutral even. Further, our results suggest that farmers do not consider extensively studied risk management strategies such as contracts, futures and insurances, a valid option for their farm, and put more faith in internal strategies such as the debt management, the liquidity management and diversification. Last, risk management is to a substantial degree performed at the household level, rather than at the farm level, with strategies such as cutting the private expenses and the off-farm employment. These results hardly differ according to the farm and farmer characteristics

Measuring productivity change using alternative input–output concepts: a farm level application using FADN data

status: publishe