DAU KALYAN SINGH COLLEGE OF AGRICULTURE AND RESEARCH

STATION BHATAPARA
ASSIGNMENT YEAR
2017-18
COURSE TITLE- Farm management, production and resource
economic.
COURSE NO- AEC 5121.
CREDITS- 2(1+1).
TOPICS- Concept of risk and uncertainty, source of risk and its
management strategies.

Submitted to Submitted by
Dr. Praveen kumar verma Virendra verma
DKSCARS BHATAPARA. Class- B.Sc (A.g.) 1st year 2nd sem.
RISK - Risk is define as a situation in which all
possible outcomes are known.
UNCERTAINTY- Uncertainty is define as a
situation in which all possible are unknown.
 DIFFERENCE BETWEEN RISK AND
UNCERTAINTY
RISK UNCERTAINTY
Meaning. ability to know inability to know
future events. Future events.
Measure. It can be It cannot be
measured. Measured.
Outcome. Outcomes are outcomes are
known. unknown.
Control. Probability Not probability.
Minimization. Yes. No.
Probabilities. Assigned not assigned.
 SOURCE OF RISK IN
AGRICULTURE.
1.PRODUCTION RISK- Its include weather, insects, disease,
technology and any other events which directly affect
production quantity and quality.
2. PRICE RISK- uncertainty in the market such as change in
price of input or output.
3. INSTITUTIONSL RISK- change in governmental and legal
polices which affect agriculture.
4. PERSONAL RISK- such as death or injury to the proprietor.
5. FINANCIAL RISK- The method in which capital is acquired
and financial and the firms ability to pay financial obligation.
• 1.PRODUCTION RISK- Its include weather,
insects, disease, technology and any other
events which directly affect production
quantity and quality.
Weather Insects Diseases
• 2. PRICE RISK- uncertainty in the market such as
change in price of input or output.

• Heding : It is risk management strategy used in limiting or

offsetting probability of loss from fluctuation in the prices
of commodities, curriencies or securities in effect.
Hedging is transfer of risk without buying insurance
polices.
• Speculation: nvolves trading a financial instrument
involving high risk, in expectation of significant returns.
The motive is to take maximum advantage from
fluctuations in the market. Description: Speculators are
prevalent in the markets where price movements of
securities are highly frequent and volatile.
• 3. INSTITUTIONSL RISK- change in
governmental and legal polices which affect
agriculture.
• 4. PERSONAL RISK- such as death or injury to
the proprietor.
• 5. FINANCIAL RISK- The method in which
capital is acquired and financial and the firms
ability to pay financial obligation.
 RISK MANAGEMENT STARTEGIES

• Enterprise diversification.
• Crop insurance.
• Contract production.
• Agronomic practices- crop rotation, selection
of suitable varieties, deep tillage, mulching
etc.
 ENTERPRISE DIVERCIFICATION
Enterprise
diversification is a
self‐insuring strategy
used by farmers to
protect against risk.
This study examines
the impact of various
farm, operator, and
household
characteristics on the
level of onfarm
enterprise
diversification.
 CROP INSURANCE

Crop insurance protect

against the loss of
crops due to natural
disasters, such as hail,
drought, and floods, or
the loss of revenue
due to declines in the
prices of agricultural
commodities.
 CONTRACT PRODUCTION
Contract farming involves agricultural production being
carried out on the basis of an agreement between the
buyer and farm pr producers.
 AGRONOMIC PRACTICES- CROP ROTATION
Agronomic practices are a vital part of farming systems. These are practices that farmers
incorporate to improve soil quality, enhance water usage, manage crops and improve the
environment. Agronomic practices focus on better fertilizer management as a way of improving
agricultural practices.