Question

Explain five ways in which farmers may overcome risks and uncertainties in farming business.

Answer 1

1. Diversification: having various enterprise so that if one falls, the farmer has something to rely on.
2. Contract production: growing crops on contract with the consumer with assurance of the market.
3. Input rationing: use of inputs sparingly to avoid wastage/ incurring unnecessary expenses.
4. Flexibility in production: being able to make alternatives in farming schedules
5. Selecting more certain enterprises: embarking on enterprise with less risk.
6. Insurance: insuring the enterprise that in case
7. Adopting modern methods of farming i.e : irrigation crop rotation & animal husbandry practice.
8. Use of government price stabilization policies.