Jesse Harder, Agricultural Economics and Management – Master’s programme
The agricultural sector has been hit hard by the recent market shock, largely due to the Russian-Ukrainian war that began in February 2022. A staggering 182% increase in the price of urea (April 2021 - April 2022) and a 150% hike in potassium chloride within just three months early in 2022 illustrates the profound impact of these market shifts on farms. This research examines how farms are managing to "survive" in this challenging environment. It examines the impact of the market shock on the farms, farmers' coping strategies and the motivations behind their decisions, and their adaptation plans. This paper focuses on a complex interplay of key concepts: organizational resilience, risk management, and decision making. 4 German and 1 Polish conventional crop farmer were interviewed to shed light on their experiences and strategies. These farms were particularly affected by price volatility, scarcity and unavailability of input goods, and rising machinery prices. To navigate these challenges, farmers employed strategies aimed primarily at “securing production”, while other strategies aimed at cushioning price volatility. These include stockpiling machinery and essential inputs such as plant protection chemicals, diesel, and fertilizers; employing distributed buying and selling strategies ("salami-tactics"); counter-hedging inputs and outputs directly; and enhancing market transparency, for example by contacting multiple agricultural traders. Farmers' planned adaptations include expanding their storage capacity for input resources, using more "salami-tactics," and increasing the use of organic fertilizer. By examining farmers' responses to the market shock, the study enriches the discourse on organizational resilience and risk management.