Holistic Approach to Risk Management in Agriculture

How Can Policy Underpin Farmers' Risk Management Strategies?

Risk management is part of farmers’ business strategy since production is subject to many uncertainties that could threaten returns or even the viability of farms. The prevalence of sources of risk that affect many farmers at once, such as weather-related hazards, is specific to agriculture. Managing these risks in OECD countries typically includes the use of a range of instruments such as production diversification, irrigation, futures markets, insurance and production/marketing contracts, as well as off-farm activities and assets. As argued in Managing Risk in agriculture: a Holistic Approach, governments have a role to play in facilitating access to market and non-market strategies, while empowering farmers to take responsibility for managing their own business risk. Learn More

Background Reading

• OECD (2009) Managing Risk in Agriculture: a Holistic Approach
• OECD (2010) Farm Level Analysis of Risk, Risk Management Strategies and Policies
• OECD Workshop on Risk Management in 22-23 November
• In-depth review of risk management system in Australia, Canada, Netherlands, New Zealand, Spain