Risks of dairy farming in Ukraine and ways of their minimization and neutralization

Abstract

Aim. To identify the main types of risks, remarkable for agricultural dairy production, to evaluate the consequences of their increase and to substantiate a comprehensive system of managing them on the level of enterprise which would promote their minimization and neutralization. Methods. Common methods and techniques were applied in the study: a combination of scientifi c techniques of abstract-logical method of elaborating theoretical provisions, deduction method while isolating specifi c risks in dairy farming from the total amount, empirical methods of investigating the activity of dairy enterprises and computer generated simulation while substantiating practical instruments of risk management in agricultural dairy production. The correlation-regression analysis was used for statistical processing of the data and study results. Results. During the investigation the following kinds of risks in dairy production were isolated: natural, ecological, technological, market-related risks. The natural risk is related to the environmental impact, fi rst and foremost, to the change in temperature regime of the environment of keeping cows, ecological component of manure utilization. The technological risk is characterized by violating the conditions of keeping cows at farms, which is manifested via loss and disposal of cows from the core herd. It has been found that currently the distribution of diseases, i.e. epizootic situation in the country, presents increased risk for farms. One of the ways to neutralize and minimize the manifestation of technological risks is improving biosafety of stock breeding complexes and developing the insurance of livestock. In addition to risks of diseases (infectious, invasion, non-contagious) and other standard risks (fi re, natural disasters, etc.), it is reasonable to insure against the following kinds of risks: interrupted production (caused by death or loss of insured animals), after which current expenses for renewal of production or forfeited profi t would be reimbursed automatically or after submission of confi rmation documents; transportation of animals, including sea, air, and railway travel; expenses to remove the remains of animals after the insured event which caused their death; reimbursing the expenses for elimination of consequences, caused by infectious diseases, which made it impossible to renew the production without prior applica- tion of disinfectants. While evaluating market-related risks, special attention should be given to the relations of producers and processors of milk. Market risks are closely related to technological risks, as milk quality has a decisive impact on the formation of procurement prices. Conclusions. The systematization of risks in dairy farming should be performed in accordance to the total system of their manifestation and to specialized identifi cation which characterizes specifi cities of this sphere. The probability of most risks, occurring in dairy production, is considerably dependent on the effi ciency of managers of agricultural enterprises and partially on legislative and executive branches of power (in the part of legisla- tive provisions). Currently the mitigation of environmental risks is possible only on condition of searching for internal reserves of ensuring the stability of dairy farming, which envisages creating conditions for production of high quality milk, minimization of expenses for its production and sale, compliance with agreements with contractors.