Risk Management in Agriculture - A Case Study in Orissa

Abstract

Risk is involved in agricultural production. In the present study, an attempt has been made to identify the various responses of farmers to risk management in agriculture in the study area. A multistage random sampling technique was adopted in the selection of the district, block, villages and respondents. The Dhankauda block of the Sambalpur district in Orissa was purposively selected based on maximum area under crops, and using the same criteria, two villages were selected. Final samples of 200 respondents were selected randomly for data collection. Data corresponded to the agricultural year 2006--2007. The findings of the study revealed that majority of the farmers were middle aged, males, belonging to the backward caste, living in a joint family, literate and above, agricultural profession, marginal and small categories of farmers and having less income. There were 192 respondents who agreed that agricultural enterprise is a risky business. Nearly 76% of the respondents agreed that, risk in agriculture is minimised at the farm level/household level; while 24% of respondents disagreed on the reduction of risk. Almost 88% of the respondents had shown a great concern on the main causes of crop failure in their locality. In the study area, it revealed that nearly 74.50% of respondents expressed that the National Agricultural Insurance Scheme (NAIS) protect the farmers against their crop losses, whereas 25.5% of respondents disagreed against NAIS. The above efforts could have helped the respondents to understand the risk in agriculture in a better way and develop various suggestive measures towards minimising the risk in agriculture. The results clearly show that overwhelming majority of the respondents (90%) agree that the crop diversification will help to avoid risk in agriculture. Further, it could be noted that 87.50% of the respondents agreed about the adoption of agronomic practices to minimise the risk in agriculture. Almost 88.50% of the farmers agreed that insurance is necessary to protect the farmers against their losses. It was also observed that nearly 136 respondents agreed regarding the fact that utmost care should be taken while selling the farm products at different points of time, whereas 64 respondents disagreed about this matter. About 84.50% of the respondents agreed, according to their concern for government price policies and programmes, to avoid market risk management in agriculture. The findings clearly indicate that the respondents in the study area are very much concerned about minimising the risk in agriculture. Intensive extension efforts should be made to convince the farmers towards risk management in agriculture. Moreover, formulating and standardising appropriate techniques to minimise risk in the farming sector for achieving better economic growth in a sustainable approach are required.