A CASE STUDY OF RISK MANAGEMENT IN ARABLE AGRICULTURE IN BOTSWANA.

Abstract

This study investigates the risks facing arable Farmers in Botswana and the risk management strategies used to mitigate against such risks. The study used exploratory case studies of a group of Farmers in an area called Mosisedi Farms located in the Southern part of the Country. Data was collected mainly through semi-structured interviews with the farm Owner-Managers. Data from the study revealed that Farmers were largely aware of and could well articulate the various risks they faced. The major risks faced by Famers were crop damage/loss due to adverse weather conditions, crop damage by wild animals and pests, input and output commodity price risk as well as losses due to unreliable labour. The methods and strategies used to manage the risks were largely similar to generic ones used elsewhere. There were however, three areas where the findings were different. First was the use of a strategy we termed risk financing through capital injection and the second was the use of a strategy we termed hazard substitution. Another key finding was that the Botswana Agricultural Marketing Board (a State-Owned Entity) was a major contributor to the financial risks faced by Farmers. The study concludes that Farmers need to improve on their risk management strategies because some still used passive risk retention for many risks.