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Risk Management in Agriculture: Production and Technical Risk Management
Abstract
Risk has always been part of the business of agriculture. It's an industry built on the unpredictable forces of nature. What looks like a promising crop or herd can suddenly fall victim to the weather, insects or disease. Farmers are continually developing new ways to manage risk, from the use of hardier and higher yielding crop varieties and animal breeds to the application of new technologies on the farm to innovative marketing strategies. Smart agricultural policy has also evolved toward risk management programming that helps farmers deal with short-term income fluctuations as a result of risks largely outside their control. But the risks in agriculture today are greater and more complicated than ever before. International competition is fierce. Technological improvements are increasing world production and driving down real commodity prices. Public demand for higher food safety standards and better environmental practices requires new investments in the food system. Advances in science and technology are raising moral and ethical questions about the way food can and should be produced. At the same time, Smart agriculture itself has never been more diverse, ranging from specialty crops planted in small plots to grain farms covering thousands of hectares. In between being livestock operations of all sizes, greenhouses, organic farms and a growing number of agricultural businesses catering to unique consumer demands? It's an environment that is demanding new approaches to how business is conducted on the farm and consequently, how governments conduct agricultural policy.
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