Table 1 Risk sources in the agricultural sector
From: Farm/crop portfolio simulations under variable risk: a case study from Italy
Nature of risk | Micro: (idiosyncratic) risk affecting individual or household decisions | Meso: (covariant) risk affecting groups of households or communities | Macro: (systemic) risk affecting the entire farm population |
|---|---|---|---|
Market/prices | Crop volatility caused by supply/demand/stock changes amplified by inefficient market conditions | Changes in prices of land, working capital or food industry requirements | Changes in input/output prices due to trade policy, new markets, or endogenous variability |
Production | Climate, pests and diseases, personal hazards, wrong technology | Climate change, rainfall, land-slides, environmental pollution | Changes in market conditions: input/output prices |
Financial | Changes in level of incomes from off-farm jobs; lack of private sources for investments | Bankruptcy, asset risk, cross-market interactions, market efficiency | Changes in interest rate, affecting capital and financial assets, market volatility induced by off-farm events, future market volatility and spot markets |
Institutional/legal | Liability risk | Changes in local agricultural and food policy | Changes in regional/national/EU policy and interventions on production/marketing |