PRICE RISK & MANAGEMENT IN DRY-LANDS OF PRAKASAM DISTRICT OF ANDHRA PRADESH

Abstract

Once farmers have decided to engage in farming activities, the production strategy selected is an important means of mitigating the risk of crop failure. Traditional cropping systems in many places rely on crop diversification and mixed farming. Crop diversification and intercropping systems are means to reduce the risk of crop failure due to adverse weather events, crop pest or insect attacks. Risk mitigation strategies are often used in combination with one another, because 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. They need to recognize the advantages and disadvantages of each risk management option both individually and in combination. Individual farmers should select an appropriate strategy based on their goals, attitudes towards risk and their personal and financial situations. Government of India has already recognized the importance of risk management in agriculture and has made great efforts to investigate the possibilities of national level risk management strategy. The need to protect farmers against risk has a concern of agriculture plan. Good risk management decisions depend on accurate information which requires reliable data, for effective decisions to be taken, farmer’s need information on many aspects of the farming business.

Key Words: diversification, risk management decisions, Risk mitigation strategies