Manajemen Risiko Dalam Agribisnis (Kuliah-2)

8/13/2019 Manajemen Risiko Dalam Agribisnis (Kuliah-2)

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[email protected]


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Risk is the probability that a hazard will turn into adisaster. Vulnerability and hazards are not

dangerous, taken separately. But if they come

together , they become a risk or , in other words,

the probability that a disaster will happen.

Nevertheless, risks can be reduced or

managed. If we are careful about how we

treat the environment, and if we are awareof our weaknesses and vulnerabilities to

existing hazards, then we can take

measures to make sure that hazards do not

turn into disasters.


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1. Production

2. Marketing

3. Financial

4. Legal

5. Human Resource


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1. Production

Risk

Know that production risk is avariation in production level

Agricultural production impliesan expected outcome or yield

Variation in expected outcomeaffects your ability to achieveexpected financial goals

1. Production Risk and Production Risk Management Tools


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Sources of Crop

Production Risk Weather

Insect damage and weed competition

Diseases Interaction with new technology

Weather and the environment

Disease effects in producing calves or finishing

Predators (coyotes, wolves, mountain lions)

Interaction with new technology

Sources of

LivestockProduction Risk



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Production RiskManagement

Tools

Enterprise diversification

Try different production practices or

practice enterprise diversification by

Growing different crops

Trying combinations of crops and

livestock

Identifying different end points in thesame production process

Growing different types of the same

crop



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Thinking of starting a new enterprise?

The answers to these questions can helpyou discover any limiting resources you

might encounter

What knowledge and management skillsdo I need?

What are the added labor needs? Where are the markets?

What do your answers tell you?


Tools



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Crop Insurance

Consider using crop insurance as a tool

to transfer your yield or price risk to

others

Crop insurance works the same way as

car insurance, the greater the coverage,

the greater the premium

Production Risk

ManagementTools



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The answers to these questions can helpyou determine if youre getting the mostout of your insurance rupiah

What are the costs?

Which type offers the best protection?

How much coverage do I need foradequate cash flow?

Which insurance product will bestcomplement my marketing plan?



Tools



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Contract production

Be prepared to commit to deliver a specific

quality and quantity of product

You must meet the contract specifications

Manage the contracted risk with crop

insurance and sound management practices


Tools



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The answers to these questions can helpyou determine if contract production is asolution for you

What benefits will a production contractprovide?

What flexibility will I give up?

Do I understand the terms of the contractor should I seek legal advice?



Tools



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New Technology

Some of the technological advances in

agriculture that have improved the

producers success ratePlanting improvements

Crop production chemicals

Harvesting equipment

Benefits of using new technology include

Lower production costs

Improved environmental quality

Higher quality product


Tools



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New technology benefits for livestock

producers include

Advances in disease control

Improved feed supplements

Better management practices


Tools



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Once again, knowing the answers to thesequestions can help you determine if usingnew technology is a useful production tool

for youWhat is the economic benefit of adopting a

new technology?

Does the adoption of a new technology

reduce my risk? Is crop insurance a better risk than adopting

a new technology?



Tools



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Year Crop A(EA)

Crop B(Eb)

1 136 862 88 643 104 924 148 1025 62 826 176 787 192 628 142 909

48

94

10 34 60

Mean (E) 113 81Standard

deviation (V) 54,34 14,67Variance(V2) 2.953,11 215,33

Correlation coeff

0.071

nEE

n

i

i /)(

1

)1/()(1

22

nEEV

n

i

i

2

1

2

1

)(

Vn

EE

V

n

i

i

Subjective approach:Probable future trends

- Demand increase

- New government regulations

- Increasing energy price

- Etc

Statistical approach :

E

V

CV



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2. Marketing Risk and Marketing Risk Management Tools

Outside forces that affect prices andmarket risk are

Weather

Actions of US and foreign gov.

Farm programs

Regulations

Embargoes

Trade tariffs

Marketing

Risk


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Personal considerations for handling

marketing risk include

Know your risk comfort level

Improve your current marketing skills

and learn new skills

Develop an integrated management

approach

Develop a marketing plan

Marketing

Risk



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Ways you can handle marketing risk

Reduce risk by avoiding higher-risk ventures Shift risk to others

Maintain flexibility

Marketing

Risk



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Reduce risk and avoid higher-riskventures by

Knowing current market information

Using key business partners

Spreading out sales

Using contract production

Creating and following your business plan

Marketing Risk

Management

Tools



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Maintain flexibility by

Timing sales and/or purchase ofoutputs/inputs

Placement where and from whom your

sales/purchases are made

Different forms of sales and input purchase

Marketing RiskManagement

Tools



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3- Financial Risk and Financial Risk Management Tools

Other financial risk can be attributed to

Poor planning

Failure to maintain control of the operation

Lack of financial understanding

FinancialRisk


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Cost and availability of debt capital

Money or capital that comes from sourcesoutside the operation, such as bank loans

Work with your lender to create a solid

relationship and reduce your financialrisk when

Theres an increase in interest rates orinterest expenses from variable rate loans

You need to borrow and access credit tomaintain flexibility

FinancialRisk



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Ability to meet cash flow needs

Typical financial obligations include

Production expenses

Debt payment

Property taxes

Insurance

Family living expenses

Address with cash flow planning and

budgeting

FinancialRisk



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Your ability to increase owner equity in

your operation is an indication of basic

business profitability

If you notice a downward-trend in your

owner equity over time, you are seeing a

lack of profitability in the business

FinancialRisk



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Manage your financial risk by

Determining your acceptable risk levels

Putting controls and tracking

mechanisms in place to maintain your

acceptable risk level

ManagingFinancial Risk



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Other ways to manage your financial

risk are

Budgeting cash inflows and outflows

Maintaining accurate and up-to-date

financial records

Conducting a basic financial analysis

Developing annual financial statements

ManagingFinancial Risk



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Principle of

increasing

risk



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Legal risks include

Business structure Contracts

Tort liability

Statutory compliance

Legal Risk

4 - Legal Risk


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Business structure has many forms Corporations

Limited partnership

Limited-liability companies

Partnership

Sole proprietorship

Trusts

They all have an effect on Income and property taxes

Estate planning and transfers

Legal Risk

4 - Legal Risk


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Contractual agreements are part of theday-to-day management of mostagricultural businesses

The types of contracts that can affectyour legal risk are

Financial agreements

Leases or crop-share arrangements

Insurance instruments

Labor

Legal Risk

4 - Legal Risk


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Tort liability includes acts of

Negligence or intentionally causeddamage related to

Farm injury

Farm discharges

Non-disclosure of knownfarmstead hazards

Consult a legal professional toensure you have adequateprotection against this type of legalrisk

Legal Risk

4 - Legal Risk


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Statutory compliance is defined as

meeting regulations imposed bygovernment agencies on your operation.

Statutory compliance risks arise from the

failure to follow regulations governingthe operation of your business

Legal Risk

4 - Legal Risk


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You need to know that statutory

compliance involves

Tax reporting and payment

Wage and worker safety

Nondiscrimination

Pesticide/herbicide use regulations

Failure to comply can result in severe fines

or other penalties

Legal Risk

4 - Legal Risk


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You can manage your legal risk better by

Obtaining professional assistance

Purchasing additional liability insurance

Contacting an attorney

Hiring an accountant or CPSA

Understanding the legal risks

4 - Legal Risk

Managing

Legal Risk


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Labor risks you should become familiarwith include

Work that is not done, is done poorly,

or not on time

High indirect labor costs can beincurred

Potential conflict with employees

Laws and regulations

Worker safety regulations

5 - Human Resource Risk

Human

Resource Risk


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You can further reduce human resource riskby

monitoring your operations hiringpractices

Always

Check personnel qualifications

Follow the hiring laws for your state

Also have plans for

Personnel transitions

Estate transfer


Human

Resource Risk


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Human

Resource Risk

Manajemen Risiko Dalam Agribisnis (Kuliah-2)

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