UNCERTAINTY IN SMES’ ASSESSMENT OF CORONAVIRUS PANDEMIC RISK IMPACT ON AGRI-FOOD SECTOR IN WESTERN BALKANS

The subject of the research is to explore the operational risks the risk of emergencies and specific Coronavirus pandemic risk that are SMEs from agribusiness sector, from Western Balkan countries exposed to, and the significances of their effect as independent variables to the sustainability of revenues in 2020. For that purpose, a survey of 102 SMEs from Agri-food and farms from the agribusiness sector from Serbia, Montenegro, Bosnia and Herzegovina, Albania and Montenegro were provided at the end of March 2020. Methods used are: descriptive statistical analysis, correlation and regression analysis, ANOVA test, Person’s correlation and multiple linear correlations. The results confirmed the hypothesis of the research which the Sustainability risk of SMEs and farms in Western Balkan countries is significantly influenced by operational risk of emergencies and, ongoing Coronavirus pandemic) risk level in 2020. The contribution could to the sector actors’ exposure to these risks for efficient managing future uncertainties. © 2020 EA. All rights reserved.


Introduction
The world has seen an explosive growth of infections with the deadly novel virus in the first half of 2020. Most of the countries have been forced to shut down large areas of social and economic life to slow contagion, the Western Balkans have not been spared. Serbia, Montenegro, Bosnia and Herzegovina, Albania and North Macedonia, have been forced also to impose tight restrictions on economic life to contain the Coronavirus pandemic.
It has to be said that the Western Balkan growth model was vulnerable before the crisis. In the region, consumption accounted for more than 60 per cent of the growth in recent years. Consumption growth in some countries has been fuelled by higher public spending and buy one-off wage policies and near double-digit growth in household lending, raising questions about the sustainability of the consumption-driven growth in the region. The contribution of investment was about 47 per cent in 2019 while net exports subtracted from growth. In Albania and Bosnia and Herzegovina, growth of investment in 2019 has been limited while consumption grew strongly driven by remittance inflows and higher consumer lending.
Across the region, net exports in 2019 were a drag on growth: on average, in 2012-18 they subtracted from growth because of the high level of imports, there are few competitive exporters, and the region's main trading partners, in particular EU members, were weakening. Productivity, including the growth of advanced manufacturing and services, has lagged behind what is necessary for the region to catch up with incomes in the advanced EU.
Going into the Coronavirus crisis, Western Balkan countries had different economic strengths and weaknesses. At 2019, Western Balkan trade deficits reached 13.8 per cent of Gross domestic product. The resilience of Western Balkan economies will be tested as the Coronavirus crisis unfolds. The economic freeze will put pressure on both government budgets and private sector balance sheets. Households will lose jobs, and some once-viable businesses will close. Throughout the economy's liquidity will need to be carefully managed to avoid escalating the crisis. There are many institutions in the Republic of Serbia and region in charge to realise integral disaster risk management measures in emergencies, such is Coronavirus, and therefore agricultural protection, but despite all efforts their work is sometimes very questionable (Radovic et al., 2015). Hence, not only government restrictions, but also the responses of households and businesses to the crisis are putting unprecedented strain on the economies in the region. Declining economic activity is also complicating public finances and expanding the financing needs of governments. Aggregate demand is collapsing, and aggregate supply is also contracting, with the collapse in orders, and the food supply chain problems. Disruptions in global and domestic supply chains hurt agribusiness very much, especially small household farming. Liquidity constraints might cause further disruptions in Agri-food production. So the risk which is an important aspect of the farming business, with the uncertainties inherent in weather, yields, prices, government Economics of Agriculture, Year 67, No. 2, 2020, (pp. 445-460), Belgrade policies, global markets, and other factors that impact farming can cause wide swings in farm income, got a new dimension in corona pandemic risk. Risk management, which involves choosing among alternatives that reduce the financial effects that can result from such uncertainties, is at the base of the motivation for the research of this paper, to explore the impact of the Coronavirus pandemic on the Agri-food sector in Western Balkan countries (Jevtic et al., 2013).
The paper is structured to present main data on the agribusiness sector in the Western Balkans, after the introduction, literature overview of the organisational risk of unexpected events and Coronavirus pandemic, and to present main findings of the field research provided in the March of 2020, on the impact of Coronavirus on the sector by surveying the attitudes and estimations of 102 SMEs from agriculture production, Farm households, and services. Discussion and Conclusions, as well as references in the Harvard style, are given at the end of the paper.

Agri-food sector in the Western Balkan countries
Agri-food sector in Western Balkan countries (Grozdanic, 2013) use to be, and still is one of the main sources of production, employment and growth in these countries (T.1)   The Agri-food sector, which is in the focus of the research in this paper, can face risks associated with each component or it could cause risks: risk of from farming, from food processing, from food-distribution, from diseases as Coronavirus pandemic, is. Risk can be internal to agri-food chains such as hazards caused by one element affecting another within the sector. Risk can be external and associated with external factors (natural environment, government policy, international trade) and/or effecting external components (consumers, residents, industries, nature). Risk can be private when it is assumed by individuals, collectives, entities, or industries, or it can be public when it affects large groups, communities, consumers, or future generations. In a narrow (technical) sense, risk management comprises individual, collective and public action(s) for reducing/eliminating risk and its consequences. In a broader sense, risk management is the specific system of social order (governance) that is responsible for the particular behaviour (s) of agents and determining way(s) to assign, protect, exchange, coordinate, stimulate, and dispute risks, rights, resources, and activities (Bachev & Nanseki, 2008; Beslac & Coric, 2019). In a particular, social-economic, technological, natural environment, the specific system of risk governance that is in place is intimately responsible for the efficiency of the detection, prevention, mitigation, and reduction of threats/risks and their consequences (Miskic et al., 2017). According to Bachev, 2013, generic forms and mechanisms of risk governance are as follows ( Figure 1):

Figure 1. Risk Management in the Agri-food Sector
Source: According to Bachev, 2013. In the agrarian and food sectors the management of natural, market, criminal, policy diverse risks are issues with particular topical interest (Babcock, 2004 Consequently, a complete range of risks is left not managed, which has adverse effects on the size and sustainability of Agri-food enterprises, market development, the evolution of production and consumption, the state of the environment, and social welfare (Curcic et al., 2017;Zakic et al., 2019). Depending on the costs and the efficiency of the specific system of governance in a particular (sub) sector, region, country, supply chain, etc., there will be unlike outcomes in terms of "residual" risks and dissimilar states and costs of human, food, environment, etc., security in different regions and periods of time. For instance, when there is inefficient public enforcement of food, labour, and eco-safety standards (lack of political will, administrative capability), then grey agrarian and food sectors develop with inferior, hazardous, and counterfeit components.

Research description
The aim of the research is, based on the literature on operational risk and statistical properties of operational losses, to explore the operational risks -the risk of the risk of emergencies and specific Coronavirus pandemic risk that are SMEs from Agri-food sector, from Western Balkan countries exposed to, and the For To that purpose, a survey of 102 SMEs from the Agri-food sector and farms from Western Balkan countries: Serbia, Montenegro, Bosnia and Herzegovina, Albania and Montenegro were provided in March 2020.
The hypothesis of the research is: H= The risk of emergencies and Coronavirus risk that are SMEs from the Agri-food sector from Western Balkan countries exposed to, significantly affect their sustainability in 2020.
There are 2 independent variables in the research; two operational risks-of emergencies (ORE), and the Coronavirus risk, and one independent variable-sustainability risk (SR).
Methods of descriptive statistics used in the elaboration of the research data and findings are correlation and regression analysis, ANOVA test, Person's correlation and multiple linear correlations.
Methods of descriptive statistics used in the elaboration of the research data and findings are correlation and regression analysis, ANOVA test, Person's correlation and multiple linear correlations. Table 3 presents the main activity of the surveyed farm households and SMEs from Agrifood sector production; where SMEs from Agri-food production make 51 (50.00%) of the total sample, Farm households, 33 (32.35%), and services in agribusiness, 18 (17.64%).

Key findings
The cross-tabulated values for the main agribusiness activity of the company and the company's revenue in 2019 are presented in Table 4. It can be seen that the highest number of companies were operating in the Agri-food production, these with the revenue in 2019 from € 10,001 to € 50,000, and small agricultural householders with the revenue less than 10.000 € in 2019, as well as the service companies in agriculture in that category of revenues.

Source: Authors
In Table 6 are given the cross-tabulated values for the main activity of the SME/farm household and the impact of Coronavirus on income sustainability in 2020. Companies from agri-food production assessed that the highest impact Coronavirus risk would have on their liquidity, farms assessed that main negative impact would be on revenue decrease, as well as service companies. All together see revenue decreases in 2020. Production companies think that the high impact could be on the amount of employee reduction. All think that Bankruptcy & Termination could happen with only 8.82%.

Source: Authors
In the further tables are given statistical values for independent and dependent variables.
The statistical values for the operational risk of of emergencies (ORE) with its variables: external theft, natural disasters, lows and suppliers are given in Table 7.

Source: Authors
The statistical values for the operational risk of Coronavirus with its variables: unprecedented health, social and economic challenges, the immediate pressure experienced by SMEs, self-employed people in the Agri-food and the need for the direct legislative power over Coronavirus matters are given in Table 8. The statistical values for the Sustainability risk (SR) with its variables: The number of employees' reduction, the loss of the market, Revenue decrease and Bankruptcy & termination is given in Table 9.

Source: Authors
The correlation of the presented model is given in Table 10, by Pearson correlation values.

Source: Authors
Between the independent variable Coronavirus risk and the dependent variable Sustainability risk (SR) is the highest correlation coefficient, 0.9860, and it is strong. The coefficient of Determination is 0.972196, which means how accurately can be predicted the dependent variable Sustainability risk (SR) relative to the independent variable Coronavirus risk, that is worth 97.21%.
In Table 11 the evaluation of the model is given. The total coefficient of determination is 0.977929, with 97.79% can be explained the variability of the dependent variable Sustainability risk (SR) by the 2 independent variables. The correlation between the variables is strong. The statistical significance score is given in (Table 12)

Source: Authors
Based on the data in Table 13, Formulas 1 and 2 of multiple regression linear equations were formed, which read:

Discussion and Conclusions
The key findings of the research in the paper have demonstrated that the Agri-food sector in Western Balkan countries deserves so special attention at the time of Coronavirus pandemic risk threatens. The Agri-food sector is, according to the information given in the paper very important sector of activities, employment and entrepreneurship, and would have to be subject of government financial and other support to overcome the expected problems. The findings of the research in the paper confirm the hypothesis that the risk of unpredictable events and Coronavirus risk could affect the sustainability of SMEs from the Agri-food sector and farm households from Western Balkan countries in 2020.
Looking further, it can be concluded that governance, along with technical, information and other issues, play a central role in risk management analysis and design. Moreover, the system of risk management is to adapt/improve by taking advantage of the summarized new opportunities and overcoming/defending against evolving new challenges.
Often, the introduction and enforcement of new obligations in the food secure, riskmanagement responsibility, and supporting private and collective initiatives in informing, training, assisting, funding, could be of more efficiency. In order to provide effective support of national policies, the design of modes for public interventions, and individual, collective and business actions, the greater support would have to be given to multi and interdisciplinary research on factors, modes, impacts of risk governance in the Agri-food chain.