Risk Management - Partnering for Prosperity

Risk is inevitable in agriculture. The decision to participate in risk is made the moment we decide to farm. How primary producers identify and manage risk has a cascading effect across the entire industry, affecting investors, supporters, and legislators. This report draws from interviews with farmers from 11 different countries across four continents, which were conducted in the midst of a global pandemic, war in Eastern Europe, battles over energy sources, rampant inflation, and a myriad of other crises. As such, it has a unique vantage point from which to identify common risks, and compare various mitigation strategies at local, national, and global scales.

By tapping into the knowledge and expertise of leaders in business risk management, stress psychology, and financial strategy, the practical case studies in this report (focusing on both local and government-level risk management) enable readers to gain a broader perspective of how risk is understood and handled in agriculture. The mission to create stability and security on the farm, must become a universal call to all stakeholders to create stability and security in a world of intertwined global food supply. Farmers constantly face both internal (originating on the farm) and external (originating outside the farm) risks, which present themselves in three ways,

•     Preventable risks: events largely within a farmer's control which can be mitigated through proactive measures and require a compliance-based approach,
•     Strategic risks: can present opportunities but may also impede the attainment of a company’s objectives. They are trackable enough to strategize around and have a degree of predictability that allows for more choice in whether to engage or not, and,
•     External risks: events that are entirely outside a farmer’s control (and often line of sight) that have the potential to seriously harm the business. 

Despite the messaging that written risk management plans are a good business tool to have on hand, and despite the resources available to create them, farmers around the world rarely have one. It is the external risks that are often dismissed, not because they are unimportant, but because they are outside of a farmer’s control and are therefore deeply uncomfortable to think and talk about. Yet, it is crucial to find a trustworthy group, primarily comprised of fellow farmers, to talk through potential risks and overcome the fears associated with external risks. While farmers are primarily responsible for thinking about and managing risk, government and industry also have a role to play.