Risk Management
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Collapse ▲North Carolina’s vegetable producers need solid information and effective tools to cope with the increased risks of farming in the 21st century. Risk has always been a part of agriculture. However, policy and other changes in the last few years have shifted the burden of risk increasingly onto farmers’ shoulders. Global competition, trade agreements such as NAFTA, a shrinking number of buyers, the loss of local processing facilities, low prices and reduced profits all contribute to increased financial vulnerability for producers. And on top of this, growers still face the inevitable risks of weather events such as hail, drought and hurricanes.
There are at least five kinds of risk involved in farming: production risks, marketing risks, financial risks, legal risks and human resource risks. All of these types of risk are interrelated. Understanding agricultural risks is a first step toward managing them.
Risk management is the process of gaining greater control over your risks, your financial returns and solvency. It’s about assessing the risks and potential returns for each business decision you make. Risk management requires evaluating the tradeoffs among your risks, expected returns and entrepreneurial freedom.
This Web site provides resources to help vegetable producers better understand how to manage risks on their farms.