Eight Risks and Countermeasures for Farm Management

The main risks encountered on the farm

Pig disease risk

There are two types of effects on the farm due to disease factors: one is the impact of diseases caused by live pigs during the breeding process or during transportation, including: large-scale epidemics will lead to the death of a large number of pigs, bringing direct Economic loss; the epidemic will have a lasting impact on the production of the farm. The purification process will reduce the production efficiency of the farm, increase the production cost, and reduce the efficiency. The internal epidemic will reduce the supply of the farm and reduce the income. The benefits are declining. Second, the impact of large-scale epidemics or safety incidents in the pig breeding industry, including: large-scale epidemics in the pig breeding industry will increase the possibility of outbreaks and bring huge epidemic pressure to the farm. And increase investment in epidemic prevention, resulting in higher operating costs; safety incidents in the pig breeding industry or outbreaks in a certain area, will lead to psychological panic among all consumers, reduce the total demand for related products, directly affect the farm Product sales bring losses to operators.

2. Market risk

Market risk is the possibility of sudden market decline due to sudden market disruption, human segmentation, increased competition, inflation or deflation, declining consumer purchasing power, and raw material supply. For the domestic hog market, due to the disorderly competition in the market, the number of live pigs increased, resulting in higher feed prices and lower hog prices. Exporting pigs carries the risk of saturation in the sales market.

3. Product risk

Product risk is the possibility of loss due to the development of new products and service varieties on the farm, the quality problems of the products, the outdated varieties or the untimely replacement. The main business income and profit of the farm are mainly derived from pig products, and the product variety is single, and there is a risk of relatively concentrated products; for the breeding farm, the quality of the pigs for sale is degraded and the birth rate is not high. The risk of market shrinkage; for commercial pig farms, the quality of pork is not suitable for consumers' tastes, and the problem of drug residues and illegal use of feed additives has not been effectively controlled. Pork safety problems have occurred, resulting in poor sales of pigs.

4. Business management risk

Management risk is the possibility of significant losses due to chaotic internal management of the farm, inadequate internal control, deteriorating financial conditions, and asset precipitation. The internal management of the farm is confusing and the internal control is not perfect, which will prevent the implementation of the epidemic prevention measures. Outbreak disease causes the risk of pig death; feeding management is not in place, resulting in waste of feed, slow growth of pigs, and increased risk of pig mortality; unreasonable purchase price of raw materials, veterinary drugs and low-quality consumables, excess inventory, waste of use, resulting in pigs The risk of increased production costs; the non-productive expenses such as travel, car, hospitality, office expenses, and product sales expenses cannot be effectively controlled, resulting in the risk of increased farm management fees and operating expenses. The pig farm has more receivables, the asset structure is unreasonable, and the asset-liability ratio is too high, which will lead to difficulties in the turnover of the farm and the deterioration of the financial situation. However, as China joins WT0, the farm will face the challenges of multinational companies in management and marketing, and it needs to be linked with international practices and common practices; if the farm cannot further improve and improve the management system based on these changes. May affect the continued development of the farm.

5. Investment and decision risk

The investment risk is that the economic benefits of the farm are reduced due to improper investment or mistakes. The investment capital has fallen. Even the day when the farm is put into production is the possibility of loss or bankruptcy; the risk of decision-making is the possibility of making mistakes due to undemocratic decision-making and unscientific decision-making, resulting in significant losses on the farm. If blindly investing in a new field during the high tide of the hog market and expanding the scale of production, there will be a risk of market saturation and a sharp drop in pig prices; improper investment location, pig breeding is greatly affected by natural conditions and surrounding sanitation environment, and there are also Certain risks. Improper decision-making on whether the hog breed is updated, expanded or reduced in scale of production will have a direct impact on the efficiency of the farm.

6. Human resource risk

The human resource risk means that the farm has improper appointment of management personnel, no full authorization or loss of elite talents, and no possibility of loss due to the unsuccessful resignation of qualified employees or employees. Managers with extensive management experience and skilled workers are critical to the development of the farm. If the pig site is in an underdeveloped area, it is difficult to attract talents due to unsatisfactory traffic and environment; the breeder's cultural level is low, and the ability to understand, accept and apply new technologies is poor. Will weaken the economic benefits of the farm; long-term closed management, information occlusion. It will lead to employees' emotional instability and affect work efficiency; the farm lacks an effective incentive mechanism, and the salary level of employees is not high, which restricts the production enthusiasm of employees.

7. Environmental, natural disaster safety risks

Environmental risks are changes in the natural environment or sudden changes in the public environment (such as SARS), which may result in loss of property or expected business objectives on the farm; natural disaster risks are caused by deterioration of the natural environment such as earthquakes, floods, fires, The possibility of loss of pig farms caused by windstorms; safety risks are the possibility of major personnel or property losses on the farm due to lack of safety awareness and lack of safety and security measures. Environment, natural disasters and safety risks are all problems that pig farms cannot ignore.

8. Policy risk

Policy risks are the possibility of damage caused by changes in government laws, regulations, policies, management systems, plans, changes in taxes, interest rates, or industry-specific rectification.

The above risks are not all the risks that the farm may encounter. Nor does it mean that the farm will face all of the above risks at the same time, but a risk will occur. It can cause damage to the farm, which can seriously damage the farm economy and even endanger it. Enterprises and risks are always accompanied, risk and profit are a contradiction and unity. High risk often means high returns. This requires pig farm operators to have the courage to take responsibility and seize opportunities in risk. Create profits, turn risks into profits, and have the awareness of risk prevention, the wisdom of managing risks, and the ability to manage risks to minimize risks.