Climate change consideration in agricultural businesses : a case study of crop farmers’ risk management in the region of Mälardalen

University essay from SLU/Dept. of Economics

Abstract: Farmers are constantly exposed to different types of risks within their business. Agricultural production is typically characterized by uncertain outcomes and serious difficulties to measure and estimate the possibility of unfavourable events. Therefore, agriculture belongs to one of the most vulnerable sectors of the economy. What poses a major risk to agriculture is climate change, along with the increased frequency of variability and extremes. Various future climate scenarios for Sweden show an expected drier climate that largely affects the environment and thus the crop production. Previous studies have evaluated and examined farmers’ perception of risk and their risk management strategies, all using a quantitative approach. In this study, a qualitative case study is used to investigate farmers’ considerations of climate change from a risk management perspective. The lenses through which we see and view the world can be described as mental models. Further, a person’s ability to assess a situation relates to experiences that develop a person’s mental models. If a farmer does not have enough information or have insufficiently developed mental models, there may arise difficulties when managing risk. The aim of this thesis is to examine if and how climate change is considered in farmers’ mental models and thus in their risk management. The results are based on twelve interviews with crop farmers in the region of Mälardalen in middle Sweden. Empirical data has been collected via semi-structured interviews, which have been analysed through thematic coding. An interview guide with open-ended questions based on different themes has been used to get the farmers’ answers and thoughts on the subject. This study can help confirm assumptions of previous studies or to bring new insights into the subject matter. The result of the study indicates that the majority of the farmers do not consider climate change in their mental models and thus not in their risk management. The farmers’ perception of what caused the previous year’s drought is mainly due to the assumption of natural variations rather than climate change

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