This study investigates how South Australian wheat growers have adjusted to the deregulation of their industry since 1989. Prior to this date growers were obliged to deliver their wheat to the Australian Wheat Board which undertook the management of price risk on their behalf. Since that date growers have an increasing number of ways by which they can price their wheat. --p. v.
Previous research that attempted to evaluate Australian farmers' decision-making in a high risk environment has often been inconclusive and contradictory. The risks associated with wheat production, marketing, and hedging/pricing are high in Australia due to irregular rainfall, distance from major markets, and difficulties with suitable hedging benchmarks. Much of the overseas research has limited value to Australia because of higher farming risks, deregulated markets, no price/ income protection policies, and no public underwriting of risks. There have been few in-depth studies that have examined relevant marketing methods and hedging strategies from a behavioural decision-making perspective in a deregulated market. In this research, the Fisher Exact Test (a variation of the Chi-square test) analysed five marketing strategies and six hedging/pricing methods used by wheat growers, across eighteen key management factors and seventeen risk attitude/adoption characteristics in NSW for the 2005 production year, with the results compared with South Australia and Victoria. The findings were then used to examine eight research questions relating to decision-making. Different management approaches by Australian wheat growers were found to affect marketing decision-making more than hedging decision-making which was more influenced by risk perception. Cash flow might be a greater contributing factor leading to emotional anxiety than either the marketing method or hedging strategy. Growers were more likely to perceive that knowledge of variable costs of production led to price risk management, and were also more likely to perceive that they target more realistic price levels when variable costs are known. Alternatively, price risk management was an incentive to lower variable costs of production. A wheat grower's farm size, debt, and farming experience influenced the choice of marketing method or hedging strategy, whilst age did not, while the impact of training was inconclusive. Regret and avoidance in decision-making was high for wheat growers. Rogers' adoption criteria have some influence on decision-making. There was much evidence to support the application of the Kahneman and Tversky's 'certainty effect' proposition to Australian wheat growers.
While a good grasp of the many separate aspects of agriculture is important, it is equally essential for all those involved in agriculture to understand the functioning of the farming system as a whole and how it can be best managed. It is necessary to re-assess and understand rain-fed farming systems around the world and to find ways to improve the selection, design and operation of such systems for long term productivity, profitability and sustainability. The components of the system must operate together efficiently; yet many of the relationships and interactions are not clearly understood. Appreciation of these matters and how they are affected by external influences or inputs are important for decision making and for achieving desirable outcomes for the farm as a whole. This book analyses common rain-fed farming systems and defines the principles and practices important to their effective functioning and management.
The urban poor living in slums are at particularly high risk from the impacts of climate change and natural hazards. This study analyzes key issues affecting their vulnerability, with evidence from a number of cities in the developing world.
This book discusses the issues of integration within food and fibre supply chains and the challenges in managing price risk. The problems of integration and price risk are interwoven in agricultural supply chains with production and supply risk as well as hoarding. However, without supply chain integration through commercial trade markets there can be no forward market upon which forward transactions and the management of price risk can be based. Without a forward market that can reduce opportunistic behaviour, there is likely to be little security of supply, particularly under high production risk and price uncertainty. Whilst price risk management is possible under certain circumstances, there are many factors that can prevent the development of forward markets or cause them to collapse, thus undermining the ability to manage price risk within acceptable risk and return parameters. Market positions therefore need to be valued and often settled daily due to the risk of contract default. In addition, the issue of currency risk and its management applies to international market positions and transactional exposures. The book analyses a range of price risk management strategies from forward contracting through to futures and options hedging, and finally to over-the-counter products. Evaluation techniques are developed to aid decision-making. The author concludes that forward market development may be the exception rather than the norm, and that whilst favourable price risk management outcomes may be possible, they can sometimes be caused more by luck than through good management. It is shown how tactics are an important consideration in decision-making to minimize costs and losses.
Risk Management and the Environment: Agriculture in Perspective is a modern academic work that seeks to bring out both to the private and the policy sectors the importance of risk management in relation to the envi ronment in agriculture, as the world moves towards freer markets. Many efforts were pooled together in making this book. Three years ago, an attempt was made by one of the editors to get a project on 'Agri cultural Risk Management and Sustainabilty' (ARMAS) funded by the European Commission. Probably deeming the proposal as prematurely novel for Europe, the Commission's screening experts abandoned its evaluation. Following that experience it became apparent that the literature on the theme ought to be strengthened and emphasized through a book by a well known publishing house. The editorial team was formed relatively quickly and an invitation to known experts in the field for contributions was issued. Subsequently, Kluwer Academic Publishers, evaluated an edited volume proposal package, and final revisions were made prior to submitting the entire manuscript for publication. We are gratefully acknowledging the moral support of several individu als as well as the patience of our publishers.
