Risk perception, attitudes towards risk and risk management: evidence and implications

Th e comprehensive risk analysis of a business such as farming entails questions on what is at stake, how important
is the risk concern and how to deal with it. We performed a sequential mixed method, with the in-depth interviews in
the fi rst stage (n = 35), followed by a survey on the Flemish FADN (n = 614) in the second, to investigate the farmers’ risk
perception, the attitudes towards risk and the perceived usefulness of the risk management strategies. We fi nd that, rather
than the short-term volatility in prices, the longer term co-evolution of expenses versus receipts is of a major concern to
farmers, next to the land availability and the policy risks. Farmers are shown to be only slightly risk averse, rather risk neutral
even. Further, our results suggest that farmers do not consider extensively studied risk management strategies such as
contracts, futures and insurances, a valid option for their farm, and put more faith in internal strategies such as the debt
management, the liquidity management and diversifi cation. Last, risk management is to a substantial degree performed at
the household level, rather than at the farm level, with strategies such as cutting the private expenses and the off -farm employment.
Th ese results hardly diff er according to the farm and farmer characteristics.