DIVERSIFICATION AS A RISK STRATEGY IN TIMES OF CHANGE: A STUDY IN THE EASTERN ORANGE FREE STATE

H. R. Binding, H. D. van Schalkwyk, J. van Zyl and H. J. Sartorius von Bach

Agrekon, 1993, vol. 32, issue 4

Abstract: Data from 100 commercial farmers in the Aberfeldy pedosystem (situated in the North-eastern Orange Free Sate) were used to analyse diversification as a risk alleviating strategy. In theory, diversification reduces risk, but when the ability with respect to management or entrepreneurship is ignored, diversification may increase risk. Results show that any excessive attitude towards risk is undesirable. Both risk averters and risk seekers showed a greater probability of finacial deterioration or failure. Risk neutrality seems to be the optimal strategy.

Keywords: Agricultural Finance; Risk and Uncertainty (search for similar items in EconPapers)
Date: 1993
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:agreko:267597

DOI: 10.22004/ag.econ.267597

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