FINANCIAL RISK MANAGEMENT IN DRY-LANDS OF PRAKASAM DISTRICT OF ANDHRA PRADESH

Abstract

Agricultural production in a country like India involves variety of risk this risk arise from climate variability frequent natural disasters, Insolvency, manmade disaster, rural infrastructure pest out breaks accidental factors, lending  money can also be risky with sudden changes in interest lead to failure of business, risk also occurs as a result of changes in government policies, finally there are risks related to the health and well being of the farmer and his family and the supply of labour for the farm, all these event together or independently affect farmers through loss in production and farm income and they are beyond the control of the farmers, these factors not just endanger the farmer’s livelihood and income but also undermine the viability of the agriculture sector and its potential to become a part of the solution to the problem of endemic poverty of the farmer’s and the agricultural labor.

Risk reducing strategies are often used in combination with one another, as no single strategy can cover all of the risk likely to be encountered, farmer’s need to consider the risks simultaneously and to develop an integrated approach for better management of farm business. Agricultural producers should not limit their risk management strategies only to lessening and offsetting the problems caused by weather and climatic events. Their effective responses to the diver’s professional, economic and political challenges are also increasingly crucial to successful farming.

Key Words: Poverty Trap, Disasters, Insolvency