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Associations between global indices of risk management and agricultural development

Bornhofen, Elesandro, Ramires, Thiago Gentil, Bergonci, Tábata, Nakamura, Luiz Ricardo, Righetto, Ana Julia
Agricultural systems 2019 v.173 pp. 281-288
agribusiness, agricultural development, computer software, databases, drought, governance, gross domestic product, infrastructure, issues and policy, monitoring, multivariate analysis, principal component analysis, risk management
Different countries around the globe have different levels of vulnerability to risks because of several factors, e.g. degree of development, governance, infrastructure, among others. The probability of occurrence of certain risks as drought and unfavorable tax policies have a direct impact on the development of the agribusiness in a given country. Hence, the aim of this study is to combine a set of risk management indices in a global scale with agribusiness performance indicators, focusing on the 96 most relevant countries regarding the agribusiness GDP (Gross domestic product). We selected 27 indicators for risk management collected from the InfoRM database and seven for agribusiness performance from the FAOSTAT database. All data used in this research are public available. The data were scaled, and then analyzed through multivariate techniques, specifically using principal component analysis (displayed in biplots) and unsupervised K-means clustering in R software. The results suggest that monitoring the indicators of risk management (InfoRM) and the establishment of strategies to shrink them may have a positive effect on the agribusiness performance of a given country. For the agribusiness improvement, nations should elaborate strategies for the joint enhancement of the indicators discussed here, observing the existing associations. The implications of the use of risk management indexes and agricultural performance indicators are discussed.