Assessment and Management Strategies of Risk in Selected Agribusiness Firm in Delta State, Nigeria

Abstract

This research work examined the various type of risks encountered by agribusiness firm owners in Delta State and their degree of impact on the agribusiness with the aim of proffering management strategies to overcome such risk using field data. Five different risks (Production, Market, Financial, Institution and Human risk) were identified in the study. Stratified multi-stage random sampling technique was used in selecting location and respondents through which one hundred and fifty-one (151) agribusiness firm owners and staffs were selected and interviewed with structured questionnaire. The study area was mapped into three agricultural zones for easy administration of questionnaire. Three local government areas (LGAs) each was selected from each of the zones to constitute the nine LGAs out of twenty- five LGAs for the administration of the questionnaires. Descriptive statistics was deployed to analyze the data collected (using SPSS software). The results obtained revealed that on production risk, agribusiness firm face excess rainfall as the highest risk of 26.5% which is attributed to climate change factors, 34.8%agribusiness owner experience excess output in market (glut) as the highest market risk which result to low price of finished product. On financial risk, unavailable credit accesses recorded the highest with 49.7% of firm owners unable to access credit facility, while 79% of agribusiness owners faced change in government policies as the major institutional risk and embezzlement of the agribusiness firm is the highest human risk with 45% owners of firm encountering it. The observed high risk factors in the various types of risk were therefore flag to be focal point for any agribusiness owners in risk management strategy of the firm.