Managing Risk (AGRI90016)

Risk management needs to be an integral part of good business practice. Risk standards and obligations are changing requiring responses in both strategic and operational management terms. Corporate agribusiness in particular needs to ensure appropriate corporate governance in assessing and managing risk.

At a practical management level farmers, merchants, and end-users in deregulated food/fibre supply chains are increasingly exposed to risk, particularly delivery risk and price variability-volatility.

The inherent trade-offs in risk management make managing risk difficult to achieve. Risk needs to be balanced between the risk of losses and the rewards through profit. In some agricultural industries, a sound understanding of the theory and practice of future market operations, and associated price risk management instruments, is fundamental to business management and decision-making.