Risk And Risk Management In Organic And Conventional Dairy Farming: Empirical Results From Norway

The objective of this study was to provide empirical insight into dairy farmers’ goals, relative risk attitude, sources of risk
and risk management responses. The study also examines whether organic dairy farming, leads to important risk sources
not experienced in conventional farming and, if so, how those extra risks is managed. The data originate from a
questionnaire survey of conventional (n=370) and organic (n = 160) dairy farmers in Norway. The results show that
organic farmers have somewhat different goals than conventional farmers, and that the average organic farmer is less
risk averse. Institutional risk was perceived as the most important source of risk, independently of conventional or organic
production system, while organic farmers indicated greater concern about forage yield risk. Keeping cash on hand was
the most important strategy to manage risk for all dairy farmers. Diversification and different kinds of flexibility was
regarded as a more important risk management strategies among organic than conventional farmer

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Author(s): Ebbesvik, Martha, Flaten, Ola, Koesling, Matthias, Lien, Gudbrand, Valle, Paul Steinar


Organizations(s): Norwegian Agricultural Economics Research Institute, Norwegian Centre for Ecological Agriculture, The Norwegian School of Veterinary Science