Economic feasibility of organic farms and risk management strategies

Abstract

Organic farmers must face different risks than conventional farmers Due to the special features of management of their productive system, and due to the specific characteristics of their cultivations. This study analyses the specific risks that organic farmers must manage as well as the different strategies that there are developing nowadays. Even if the Spanish farmers rely on the insurance system to manage their risks, today organic farmers do not have specific insurance products to manage them. The methodology and results presented in this study include a risk analysis carried out by evaluating statistical, probabilistic, and stochastic properties of the organic production data. We evaluate and discuss the aspects of our study that relate to other international studies. Productions considered in this research are olives, vineyard and cereals. Specific risk management strategies developed by organic farmers – in contrast with conventional farmers – have been identified and quantified, showing the different attitudes based on their risk perception and the potential vulnerability of their farms. Agricultural insurance tool for organic farmers in Spain has been studied and analyzed as an important risk management