Scientific Research and Essays

  • Abbreviation: Sci. Res. Essays
  • Language: English
  • ISSN: 1992-2248
  • DOI: 10.5897/SRE
  • Start Year: 2006
  • Published Articles: 2750

Full Length Research Paper

Measuring risk and designing risk management strategies for dry onion growing farms: A case study for Amasya Province of Turkey

Ä°lyas ÇETÄ°N and Kemal ESENGÜN*
KaramanoÄŸlu Mehmetbey Üniversitesi, Ä°ktisadi ve Ä°dari Bilimler Fakültesi, Ä°ÅŸletme Bölümü, Karaman/Turkey.
Email: [email protected]

  •  Accepted: 11 December 2012
  •  Published: 24 December 2012

Abstract

The aim of this study was to measure the risks and to design appropriate risk management strategies for dry onion growing farms in Amasya Province of Turkey. The data used in the study belong to the 2007-2008 production period and were obtained through questionnaires from 101 farms, selected by stratified sampling method. Operational and financial risks exposed by farms were measured using probability distribution functions of crop prices and yields. According to operational and financial risks estimated for farms, it was determined that risk decreased in larger farms. Total risk for the first group of farms was estimated to be 76%, while those of second and third groups were 30 and 6%, respectively. Based on risk management principles, risk control strategies such as diversification of production activities or income sources can be suggested for the first group farms, and risk transfer strategies such as establishment of cooperatives, contract farming and agricultural insurance can be recommended for the second group farms. The third group of farms, on the other hand, has no options but to accept the risks involved.

 

Key words: Dry onion production, risk, risk measuring, risk management strategies, Amasya/Turkey.