Coping with Risk in Agriculture

Risk and uncertainty are inescapable in agriculture. Farmers face production risks, from the weather, crop and livestock performance, and pests and diseases, as well as government-controlled institutional risks, and personal or human risk. Together with market or price risks, these business risks are further related to financial risk, all of which must be carefully balanced for successful agriculture. This book introduces the nature of agricultural decision making under uncertainty and discusses the concept of rational choice and its foundations in theories of probability and risk preference. It describes methods for analyzing risky decisions and techniques for managing agricultural risk. With numerous practical examples, the book is aimed at senior undergraduate and graduate students of agricultural economics and farm management or business, as well as advisers to farmers.