Sources of uncertainty while running a business under VUCA conditions from the point of view of agricultural producers. Case study

Abstract

In recent years, unexpected events such as the COVID-19 pandemic, the war or the effects of climate change have caused producers (including farmers) to face completely new challenges. Because these events were unpredictable, complex and forcing manufacturers to operate under conditions of greater uncertainty, the term VUCA has become increasingly used. The world of VUCA is a reality in which manufacturers have to find their own way of operating, and applying environmental analysis with the use of risk management tools can allow them to properly prepare themselves to seize opportunities and mitigate risks in times of crisis.
The purpose of this article is to identify the uncertainties (risks) in times of VUCA, which agricultural producers are most afraid of in their activities. On the basis of the modified FMEA analysis, the audited producers assessed the significance of the potential problems they identified, the possibilities and the predictability of their occurrence. According to them, the biggest uncertainty is caused by the rising costs of their current operation, as a result of inflation. It is a worrying fact that the legal factors, monetary and fiscal policies of the state, which by definition should mitigate the effects of functioning under VUCA conditions, due to their unpredictability are creating a sense of instability and the inability to formulate medium- and long-term plans. On the other hand, the indication by producers of a lower lever risks for demand factors may mean that demand for agricultural products is relatively stable and not subject to sudden fluctuations. Producers perceive greater risks in the unpredictability of supply, both for independent reasons (weather) and those resulting from political consequences (e. g. the influx of goods from Ukraine).