Methods for reporting the risk in investment decisions in agriculture

Viktoria Mendeva

Abstract: Environment and environmental dynamics suggest the use of modern methods to evaluate the effectiveness of investment decisions. Analysis and risk assessment helps the farmer to rate the opportunities to reduce and avoid them, and also to select the optimal balance between risk and yield associated with a concrete investment. The risk expresses the probability of events that affect the economic outcome of the farm. For example, a farm that presents high variability in economic outcome compared to their average costs in the past is a investment with higher risk. Conversely, farm with positive financial indicators have a lower level of the investment risk. The purpose of this article is to be made analyze of the investment in dairy cattle related with the protection of waters against pollution. Traditional methods for evaluation of the investment, reports the future with a high assurance, which assumes a passive approach to investment analysis. In this connection it is necessary to apply the approaches where through to overcome the uncertainty and lack of flexibility inherent in traditional methods.

Keywords: efficiency; investment in agriculture; return

Date published: 2018-03-21