Identification and evaluation of risk in agribusiness: an empirical study on vegetable sector in India

Rajeev Kumar Panda, Tushar Das and Sreekumar

International Journal of Indian Culture and Business Management, 2012, vol. 5, issue 4, 438-457

Abstract: This study aims at evaluating the risk involved in agricultural business in India from farmer's perspective. This study is carried out in Bargarh district of the state called Orissa located in eastern part of India. Agricultural diversification in the state of Orissa in general and Bargarh district in particular is highly intensified towards vegetables production which gives farmers better return on investment. But there are some serious risks involved in the business which affect the spirit of the farmers towards vegetable business. This paper tries to explore the perception of farmers towards the risk variables influencing vegetable production and marketing in the district of Bargarh. This study reveals five major risks in vegetable farming namely investment risk, socio-economic risks, environmental risk, production risk and marketing risk. These risks make the propositions more complex as perceived by the farmers. This study recommends risk management strategies such as future contracting, crop insurance, contract farming, etc. if implemented properly may mitigate the above-said risks and bring efficiency in the system. The empirical findings may be useful for the stakeholders involved in agricultural business.

Keywords: risk sources; vegetables; future contracts; crop insurance; food industry; agriculture; India; risk identification; risk evaluation; agribusiness; farmers; Bargarh; Orissa; return on investment; risk variables; vegetable production; investment risks; socio-economic risks; environmental risks; production risks; marketing risks; complexity; complex propositions; risk management; future contracting; contract farming; risk mitigation; efficiency; stakeholders; Indian culture; business management. (search for similar items in EconPapers)
Date: 2012
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