Assessment of risks and risk reducing strategies of small farm operators in Tennessee

Simbarashe Pasirayi, Tennessee State University


Small farms represent an important segment of the agricultural sector and rural communities in the US. They account for 56 % of the total U.S. value of agricultural land and buildings, but account for 91 % of all U.S. farms and more than half of the land in farms. This trend holds true for the State of Tennessee where 93.2 % of the farmers had small scale operations in 2007. Nearly half of Tennessee's land area, or 11.8 million acres, is in farmland, and there are more than 91,000 farms in the state. Tennessee small farms generate more than $8 billion annually and provide more than 10,000 jobs, making them one of the major contributors to State GDP. Small farmers, however, face a number of problems that continue to challenge their viability. Their most pressing concerns involve changes in government policies/regulations (institutional risk), decreases in crop yields or livestock output (production risk), and uncertainty in commodity prices (price risk). Thus, there is need to effectively manage risks that threaten small scale operators' viability. The purpose of the study was to examine small farmers' perceptions of risk, sources of risk and risk management practices. Data from randomly selected small farmers in Tennessee were collected and analyzed. Results revealed that despite a relatively diverse sample in terms of education, farm size, leverage ratio, and farm income, there was a considerable agreement on the relative importance of various sources of risk and alternative risk management practices followed by small scale farmers in Tennessee. The results of the study clearly points out the need to make a concerted effort by all working with small farmers to implement risk management strategies that will enhance small farmers' economic viability.

Subject Area

Agricultural economics

Recommended Citation

Simbarashe Pasirayi, "Assessment of risks and risk reducing strategies of small farm operators in Tennessee" (2011). ETD Collection for Tennessee State University. Paper AAI1497840.