Analysis of risk avoidance through diversification, with reference to agricultural farms

Rajnović, Ljiljana and Borojević, Nebojša and Eremić, Jelica (2025) Analysis of risk avoidance through diversification, with reference to agricultural farms. Economics of Agriculture, 72 (2). pp. 563-576. ISSN 0352-3462

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Abstract

In this paper, the authors analyze the advantages of business diversification as a concept of a stable investment strategy, by investing capital in several different types of investments with the aim of avoiding or reducing risk. In agriculture, diversification is an agrarian policy embodied in increasing the diversity of economic activities in the rural economy. The social and economic development of rural areas is based on the creation of conditions in which the income of economic entities becomes more stable than in the case when they are engaged exclusively in agriculture, which all contributes to strengthening the social economic position of economic entities in agriculture and slowing down depopulation. The paper, using descriptive and comparative methods, analyzed the successful diversification of agricultural holdings in the territory of Srem. The aim of the research is to look at all the benefits that diversification brings to economic, ecological and social rural development.

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