(II) PRICE OR MARKET RISK:

 Agricultural commodity prices are highly

volatile because of the fluctuations of
input and output prices.
 Pricing that is too high will reduce sales,
however if the price is placed too low it will
reduce profits obtained.
 The divided agricultural market will be
influenced by local supply and demand conditions, while the market is
more integrated globally will be significantly affected by the dynamics of
international production.
 Due to lack of rainfall, crop production often decreases thus causing prices
to rise.
 Another type of market risk arises is inability to deliver easily damaged
products to the right market at the right time and it may be affected the
efforts of manufacturers.

ROLE OF AGRICULTURAL COOPERATIVES

 ‘100 Basic Goods Supply Program’ or better known as BA100 is an

integrated program introduced by ANGKASA in its ongoing efforts to
mobilize the cooperative business especially helping and offering the sale
of basic goods at affordable prices.
 They will provide better quality services to members and not based solely
on profits.
 They can help the agricultural sector by supplying consumers directly with
fresh goods and basic necessities from suppliers without having to go
through a middleman.
 If the cooperative can deal directly with the manufacturer without using
middlemen, it can be reduced the increasing price of goods.
 Cooperatives members can also be marketing agents of necessities who
manufacture or produce their goods directly to the cooperative.
(v) Technology risk:
 Farmers are responsible for all the consequences of their activities. For
example, is improving machinery, water management, quality and quantity
of the agricultural products and by using the soil nutrients, water,
pesticides efficiently and effectively.
 The use of new technologies in modernizing agriculture such as in the
introduction of genetically modified crops has led to increased producer
liability.
 GMO allowed with many profits. For example, they have become a very
effective way for farmers to increase their profitability by allowing them to
spend less time managing resources.

ROLE OF AGRICULTURAL COOPERATIVES

 A new generation of cooperatives was introduced where forward
integration was implemented to enable farmers to venture into value
-added activities such as manufacturing and processing. These activities
will further develop the farmers, in addition to providing economic and
social benefits
 ETI

Types of risk (i) Production risk:Agriculture is often characterized by high variability of

production outcomes or, production risk. Unlike most other entrepreneurs, farmers are
not able to predict with certainty the amount of output that the production process will
yield due to external factors such as weather, pests, and diseases. Farmers can also be
hindered by adverse events during harvesting or threshing that may result in production
losses.

(iv) Institutional risk: Another important source of uncertainty for farmers is institutional
risk, generated by unexpected changes in regulations that influence farmers’ activities.
Changes in regulations, financial services, level of price or income support payments
and subsidies can significantly alter the profitability of farming activities. This is
particularly true for import/export regimes and for dedicated support schemes, but it is
also important in the case of sanitary and phytosanitary regulations that can restrict the
activity of producers and impose costs on producers.