AGRICULTURE RISK MANAGEMENT: A CASE STUDY ON ROCK MELON FARM IN SEPANG, SELANGOR, MALAYSIA

Wira Abu Bakar,Rabihah Md Sum

doi:10.26480/fabm.02.2020.75.82

Abstract

The objectives of this study are to identify risks faced by farmers in agriculture project and investigate their risk management practices. The subject of investigation was a rock melon farm in Sepang, Selangor Malaysia. The participants consisted of four farmers and two officers. Data was collected using semi-structured interview questions and analyzed using content analysis. The study finds agriculture risk management can be divided into two groups: agriculture project risks and agriculture production risks. Agriculture project risks are events causing project failure. The risks are created by farmers and risks arise from project operations Risk factors created by farmers are farmers’ attitude, lack of knowledge/training, lack cooperation among farmers and farmer refuse to follow procedures. Risk factors from operations are farm management, insufficient fund/capital, undiversified farm activities, failure to achieve KPI and follow procedures. Agriculture production risks are events causing low productions. The risks arise from machineries efficiency and farming technologies. Risk factors for machinery efficiency are immature machineries technology, and suitability of machines for local crops and small farm size. Risk factors for technology are unsuitable technology for local farming, technology too expensive for small farm and technology transfers from developed countries. The participants view risk management process as consisted of risk identification, risk evaluation/risk analysis, risk assessment and risk treatment. Their risk management strategies to mitigate risks are production diversification, keeping a logbook on farming activities, obtaining skill and knowledge in farm management, job multitasking by farmers and having a comprehensive risk management guidelines.

Highlights

Since independence 62 years ago, agriculture is the basis and major focus of Malaysia’s economic growth
This study investigates risks faced by an agriculture project in Malaysia
The findings from this study indicate that diversification of crop and animal production, and pests and disease monitoring and prevention are the preferred agricultural risk management strategies employed by farmers

Summary

Introduction

Since independence 62 years ago, agriculture is the basis and major focus of Malaysia’s economic growth. Before 1970s, agriculture contributes substantially to Gross Domestic Product (GDP). In 1950s, the sector contributes close to 50% of the country’s GDP. By 2009, its importance has been reduced to below 10% (Istikoma and Rahman, 2015) and declining further to 8.1% in 2016. The major agriculture contributor to GDP is plantation crops such as oil palm and rubber. While food crops such as rice and other local fruits contribute only 19.5% to GDP (Jabatan Perangkaan, 2017). The global requirement for agriculture is expected to expand in tandem with the growing population. The contribution of the agriculture sector to the country’s GDP appears to be declining

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