**6. References**


<sup>\*</sup> Corresponding Author

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444 Risk Management – Current Issues and Challenges

individual respondents.

the construction company.

**Author details** 

Nerija Banaitiene\*

**6. References** 

 \*

Corresponding Author

The lack of experience makes it very difficult to change Lithuanian contractors' attitude towards risk management. Nevertheless, the construction companies need to include risk as an integral part of their project management. In our view, the use of risk management in the Lithuanian construction companies is low to moderate, with little differences between the types, sizes and risk tolerance of the organizations, and experience and risk tolerance of the

Qualitative methods of risk assessment are used in construction companies most frequently, ahead of quantitative methods. In construction project risk management, risks may be compared by placing them on a matrix of risk impact against a probability. Mitigation options are then derived from predefined limits to ensure the risk tolerance and appetite of

The risk management framework for construction projects can be improved by combining

*Department of Construction Economics and Property Management, Faculty of Civil Engineering,* 

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*Vilnius Gediminas Technical University, Vilnius, Lithuania* 

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**Chapter 20** 

© 2012 Aditto et al., licensee InTech. This is an open access chapter distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

© 2012 Aditto et al., licensee InTech. This is a paper distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

**Sources of Risk and** 

http://dx.doi.org/10.5772/50392

**1. Introduction** 

risks they confront.

**Risk Management Strategies: The Case of** 

Satit Aditto, Christopher Gan and Gilbert V. Nartea

Additional information is available at the end of the chapter

**Smallholder Farmers in a Developing Economy** 

Risk in agriculture is pervasive and complex, especially in agricultural production.(1, 2) Farmers confront a variety of yields, unstable output and input prices and radical changes in production technology as inherent in their farming operations. These affect the fluctuation in farm profitability from season to season and from one year to another.(3, 4) The sources of risk and level of its severity can vary according to the farming systems, geographic location, weather conditions, supporting government policies and farm types. Risk is a major concern in developing countries where farmers have imperfect information to forecast things such as farm input prices, product prices, and weather conditions, that might impact the farms in the future.(2, 5, 6) The types and severity of risks that farmers face differ from place to place. Incorporating and understanding the effects of risk at the farm level will benefit policy makers who develop appropriate strategies that can help farmers survive the numerous

Sources of risk in agriculture are classified into *business risk* and *financial risk.*(1, 7) Business risks can be classified further into a) production or yield risk, b) marketing or price risk, c) institution, policy, and legal risk, d) human or personal risk, and e) technological risk. On the other hand, financial risk occurs when farmers borrow to finance farm activities as farmers often face variations in interest rates on borrowed funds, inadequacy of cash flow

For several decades, agricultural production in Thailand has faced many risks such as variability in yields, product-prices and cost of inputs.(10-12) Thai farmers typically grow their crops in rain-fed conditions due to poor irrigation systems.(13) The annual rainfall fluctuates widely each year, and pests, diseases and poor soil fertility affect the yields of cash crops in

for debt payments and changes in credit terms and conditions.(8, 9)

