Risk perceptions and management responses to risk in pastoral farming
in New Zealand.
S.K. Martin
Farm Management Department, P.O. Box 84, Lincoln University,
Canterbury, New Zealand.
Proceedings of the New Zealand Society of Animal Production 1994,
54: 363-368
The environment facing pastoral farmers in New Zealand is much more
risky than it was a decade ago. This has required primary producers to identify
their sources of risk and to take measures to protect their businesses against
these risks. A nation-wide postal survey of 1750 dairy, sheep and beef and deer
farmers was undertaken in July 1992 to determine the importance which
pastoral farmers attached to different risk sources and strategies for managing
risk in the post-deregulation environment. Usable responses were received
from 885 farmers. A follow-up telephone survey of non-respondents found no
evidence of non-respondent bias. Farmers in all three groups considered
business risk to be higher than financial risk, with changes in product prices
being the most important risk source. Other important risks were changes in
the world economic and political situation, changes in New Zealand's
economic situation, changes in input costs (except for deer farmers), rainfall
variability, pests and diseases (for deer farmers), changes in producer board
policies (for dairy and deer farmers), changes in government laws and policies
(for deer farmers) and risks associated with accidents or health problems. A
range of management responses were used to combat risk. For all three groups
of farmers, routine spraying and drenching and maintaining feed reserves were
the most important risk management responses. Keeping debt low, managing
capital spending and maintaining both short and long term flexibility in
farming operations were also considered important. Sheep and beef cattle and
deer farmers also consider the marketing responses of market information,
spreading sale and having more than one enterprise to be important.
Keywords: NZSAPAB;
risk; business risk; financial risk; risk sources; risk management;
New Zealand pastoral farming.
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Last Updated 25-01-1997
