PERCEPTIONS OF RISKS AND RISK MANAGEMENT STRATEGIES; AN ANALYSIS OF DUTCH LIVESTOCK FARMERS

The risk environment of farmers is changing and new risk management strategies are being introduced. Beal (1996) stated that risk management strategies adopted by farmers will be in accordance with their personal preferences for risk. In this context it would be useful for developers and sellers of new risk management strategies to have insight into farmers' preferences for risk. This paper studies to what extent such preferences are farmer-specific or whether general relationships exist. By means of a large questionnaire survey among 2700 livestock farmers in the Netherlands we gathered data on four groups of variables, i.e. socioeconomic characteristics of the farm, farmers' attitudes towards risk, their perceptions of sources of risk, and their perceptions of risk management strategies. Various techniques of multivariate data analyses have been used to analyse the relationships between these groups of variables. Many significant relationships were found (although not to a great extent for attitudes towards risk). However, we are cautious in recommending that new risk management strategies need to be fully fine-tuned to aspects analysed in this study. Low values of the adjusted R-squared indicate that there are still other (possibly even more personal) aspects that determine the final perception of a farmer of a risk management instrument. In addition, results of this study reflect farmers' perceptions of risk management strategies, which is not necessarily the same as the extent to which they would actually use such strategies.