Weather. Markets. Global events. Farmers still have to produce the world’s food amid a world of uncontrollable factors.
“Any farmer will tell you that farming is a lot like gambling,” said Andrew Anderson, assistant professor of agricultural economics and agribusiness for the University of Arkansas System Division of Agriculture. “To be able to have policies that are created understanding that risky environment is really important.”
Anderson investigates the role of risk in decisions throughout the agricultural supply chain. He said he is hoping his research will improve policy-making decisions and help farmers and others develop strategies to manage risky environments.
Risk can come from various sources for agricultural producers, Anderson said. Two especially significant factors are uncertainty in the final price and production quantity — price risk and production risk. Farmers make production decisions long before they know the price, and uncontrollable variables such as weather make it difficult to predict production outcomes.
Some economics…
