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Risk and Resilience in Agriculture: Defining Risk and a Framework for Moving Towards Resilience in Agriculture

Dennis Kaan (September, 2000)

Summary

Farmers and ranchers make decisions in a risky environment every day. The consequences of their decisions are generally not known when the decisions are made. Furthermore, the outcome may be better or worse than expected. Variability of prices and yield are the biggest sources of risk in agriculture. Technology changes, legal and social concerns, and the human factor itself also contribute to the risk environment for agriculture producers. The two situations that most concern agriculture producers are: 1) is there a high probability of adverse consequences and 2) would those adverse consequences significantly disrupt the business.