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Ökologischer Betrieb
© BLE, Bonn/Thomas Stephan
Ökologischer Betrieb
Institute of

BW Farm Economics

Risk Management

Active risk management instead of passive reaction!

Farms are confronted with a multitude of uncertainties and risks. In particular, extreme weather events and strong price fluctuations present major challenges. Climate change and increasing interdependencies with other economic sectors and policy areas pose the threat that income fluctuations and economic risks for agricultural businesses will increase significantly.

Our aim is to develop information and decision-making tools for farmers and agricultural policy makers to further improve risk management in agriculture and to adapt it to future challenges, thus making it more "crisis-proof". Against this background, we analyse the significance and development of important risk factors and research farmers' behaviour in dealing with specific risks. We investigate the effectiveness and efficiency of measures to deal with risks, such as crop diversification, insurance, and hail protection nets. One focus of our work is on the possibilities and limits of state support for risk management. We are also working on improving the methodological prerequisites for comprehensive impact analyses. For economic analyses of risk management on farms, the farm accountancy data network represents one of the most important foundations for our work.

Risk management is a cross-sectional task that affects all areas and levels of agricultural enterprises and has close links to many research fields of the Thünen Institute. In addition, we cooperate with universities and research institutions nationally and internationally.

Our Topics

Risk exposition

The basis of agricultural risk management is the identification of the risks to which farmers are exposed. It is important that this identification is based on facts and figures and is not biased (i. e. overweighted or underweighted) by feelings and emotions.

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Risk exposition

Risk behaviour

Have you ever thought about insurance against natural hazards such as floods and storms? - Most certainly, if you or people around you have been victims of such a disaster! But without your personal experience? With a view to politically relevant issues in agriculture, we investigate how farms deal with the risks they encounter. Using our research, we suggest options for actions by policymakers to promote effective risk management and reduce public costs.

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Risk behaviour

Risk management instruments

How do farmers effectively protect themselves against risks and the consequences of damaging events? What can agricultural policy makers contribute to improve preparedness, management and adaptation to changing risks?

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Risk management instruments

Risk modelling

What does projected climate change mean for the risk of farm income losses in Germany? Will new trade agreements lead to greater or smaller price fluctuations?

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Risk modelling

Direct contacts

Dr. Frank Offermann  co-ordinates the work on Risk Management.

M. Sc. Christoph Duden   focuses on risk management in agriculture. In his scientific work he has dealt with the "measurement" of risk exposure, index insurance, farmers' risk behaviour and the modelling of risk behaviour in economic models.

M. Sc. Jonas Schmitt   examines the limits of on-farm risk management to cope with extreme weather events and the challenges for government support for off-farm risk management instruments such as weather insurance.

Selected projects

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