Version 1
: Received: 1 October 2018 / Approved: 1 October 2018 / Online: 1 October 2018 (17:07:21 CEST)
How to cite:
Khasan, A.; Rondhi, M.; Aji, J.M.M. Who Bear the Most Risk? Risk and Risk Shifting in Indonesian Broiler Contract. Preprints2018, 2018100020. https://doi.org/10.20944/preprints201810.0020.v1
Khasan, A.; Rondhi, M.; Aji, J.M.M. Who Bear the Most Risk? Risk and Risk Shifting in Indonesian Broiler Contract. Preprints 2018, 2018100020. https://doi.org/10.20944/preprints201810.0020.v1
Khasan, A.; Rondhi, M.; Aji, J.M.M. Who Bear the Most Risk? Risk and Risk Shifting in Indonesian Broiler Contract. Preprints2018, 2018100020. https://doi.org/10.20944/preprints201810.0020.v1
APA Style
Khasan, A., Rondhi, M., & Aji, J.M.M. (2018). Who Bear the Most Risk? Risk and Risk Shifting in Indonesian Broiler Contract. Preprints. https://doi.org/10.20944/preprints201810.0020.v1
Chicago/Turabian Style
Khasan, A., Mohammad Rondhi and Joni Murti Mulyo Aji. 2018 "Who Bear the Most Risk? Risk and Risk Shifting in Indonesian Broiler Contract" Preprints. https://doi.org/10.20944/preprints201810.0020.v1
Abstract
Contract between grower and integrator has been used extensively in broiler industry all over the world. One important advantages of contract is risk management, in which contract shifts a portion of grower risk to integrator. Thus, this paper attempted to measure the amount of risk shifted from grower to integrator and the consequences of this benefit to grower. Using a panel data of actual production records of 46 Indonesian broiler growers for the period of January 2014 through December 2017, we systematically measure the amount of risk shifted to integrator and its consequences to grower. The results showed that 78.43% grower risk is shifted to integrator. However, to acquire this benefit grower receive 15% less income. Furthermore, grower face the possibility of losing their asset and stopping their production as the consequences of entering contract.
Keywords
Risk shifting, broiler contract, panel data
Subject
Business, Economics and Management, Economics
Copyright:
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
