Quantifying systemic and idiosyncratic risks in agriculture: A study of Kazakhstan's grain production volatility

Talgat Kussaiynov; Ainur Bulasheva; Sandugash Tokenova; Gulnara Mussina

doi:10.15549/jeecar.v10i7.1417

Authors

Talgat Kussaiynov Saken Seifullin Kazakh Agricultural Research University, Astana, Kazakhstan
Ainur Bulasheva University of Reading https://orcid.org/0000-0003-0929-5661
Sandugash Tokenova Saken Seifullin Kazakh Agricultural Research University, Astana, Kazakhstan
Gulnara Mussina Saken Seifullin Kazakh Agricultural Research University, Astana, Kazakhstan

DOI:

https://doi.org/10.15549/jeecar.v10i7.1417

Keywords:

Agriculture, Grain Production, Systemic Risk, Idiosyncratic Risk, Economic Loss

Abstract

This article aims to propose a method for quantifying the impact of idiosyncratic and systemic risks on agricultural production volatility and to develop techniques and procedures for calculating the number of losses due to systemic risks. The analysis is based on grain yield and price data adjusted for inflation, trends, and acreage in the northern grain-producing region of Kazakhstan from 2005 to 2017. This study presents a method for determining the proportion of systemic and idiosyncratic risk in variations in agricultural production volume. Using a method based on the beta factor can significantly reduce subjectivism and prevent exploitation when assessing and compensating farmers for damages resulting from adverse natural phenomena. The authors believe this is the first study to examine the impact of systemic and idiosyncratic risks on the volatility of production volumes in the grain industry under specific economic conditions in emerging markets.

Author Biographies

Talgat Kussaiynov, Saken Seifullin Kazakh Agricultural Research University, Astana, Kazakhstan

Talgat Kussaiynov is a Doctor of Economic Sciences, Professor at Saken Seifullin Kazakh Agricultural Research University, Astana, Kazakhstan. The sphere of scientific interest is decision-making under conditions of uncertainty in agriculture. Author of over 100 publications, including 8 monographs. The main executive of the funded scientific project: "Methodology of analysis and optimisation of the rural county socio-economic model (based on the materials of Northern Kazakhstan)".

Sandugash Tokenova, Saken Seifullin Kazakh Agricultural Research University, Astana, Kazakhstan

Sandugash Tokenova is a Doctor of Economics PhD, Senior lecturer of the department «Accounting and Auditing» at Saken Seifullin Kazakh Agricultural Research University, Astana, Kazakhstan. Spheres of scientific interests are problems of regulation and financial reporting of business entities.

Gulnara Mussina, Saken Seifullin Kazakh Agricultural Research University, Astana, Kazakhstan

Gulnara Mussina holds a Master of Economics and is a Lecturer in the department «Accounting and Auditing» at Saken Seifullin Kazakh Agricultural Research University, Astana, Kazakhstan. The sphere of scientific interest is the analysis of data and simulation modelling.

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