Diversification and risk: An application in the agricultural market

In a context where environmental conservation is sought through forest maintenance and the recovery of degraded soils, intensifying the use of arable land is a necessity. Diversification with the integration of agricultural activities to generate income without compromising the environment is an alternative for producers who wish to fit into the most modern models of sustainable economic development and minimise the risks inherent in rural activities. This study presents a tool for rural producers and users in general to mitigate risk in the agricultural market. This tool refers to a table with different portfolios composed of different agricultural activities, accompanied by their risk and monthly operating return, in addition to the optimal allocation of financial resources and rural property area for each activity. It is concluded that it is possible to manage risk in a simple way, producing different agricultural activities jointly in order to mitigate the effects of price fluctuations.

Pagina's: 84, Paperback, Our Knowledge Publishing