Articles
RISK MANAGEMENT IN HORTICULTURAL FARMS OF HUNGARY
We demonstrate the basic concept of risk perception and several types of risk management possibilities.
In the transition period farms are characterised by small size and shortage of capital.
These characteristics make them sensitive to leverage effects.
One bad year may cause crucial problems.
Knowing the relative low-income level of agricultural producers in Hungary and the rigidity of cost structure, the marketing initiatives and the price politics could be the most flexible and effective tools in limiting leverage and risk.
We examined the behaviour of the growers with the help of a survey.
The survey’s results were compared with the conclusions of the theoretical and statistical analyses.
Interviewed farmers’ opinions were in line with our expectations in the case of risk sources – high rank of price (input-output), market risk and counterpart risk.
Concerning the risk management tools, the production responses were used to the higher extent.
In accordance with our expectation diversifying activities – growing several types of plants is the most important in risk protection.
We were surprised by ratio of development in order to avoid technological risk.
In case of selling solutions only part of the producers were in favour of contracting and a small part of them joined some integration.
Further financial risk avoiding methods used were off-farm investments and other jobs.
We have seen substantial business opportunities and education needs in risk management in the horticulture industry in Hungary.
Farmers can benefit from risk management experiences gained in the transition from planned to market economy, in meeting the challange of the actual transition process: EU accession.