Professional Documents
Culture Documents
By Dennis A. Kaan
Colorado State University
Risk Management is a relatively new term for The test is strictly a tool to help call attention to
agricultural producers but not a new concept. how well you understand these management
Risk has always been a part of farming and situations. Scoring low in the test does not
ranching and so has skilled management. What mean you ought to look for other work. But it
has been lacking is the use of these two words may be wise to seek advice from professionals
synonymously. in the areas where you are less confident about
your abilities. Interaction with others who are
Today, these two words represent a concept you knowledgeable in the subject area is always
should take seriously. The 1996 Farm Bill has beneficial. Even experienced managers can
opened the way for you to make the most of always learn something new, especially when
your own planting decisions. Support payments the business environment for agriculture is
are being phased out under this farm bill. changing so rapidly. Another potential
Without target price supports, markets can information and learning source would be a
fluctuate widely. It means more opportunity as local risk management or marketing club.
well as more risk. You need to understand Clubs of this nature are made up of producers
those risks and learn how to manage them. who share a common goal; to achieve long term
success with their agricultural operation.
As a starting point, it maybe helpful for you to
test your knowledge of various aspects of risk After completing the test, the next step should
management. University of Nebraska be to develop a risk management plan for your
economists Doug Jose and Ram Valluru have operation. First, you will need to get training or
put together the following self-assessment quiz secure expertise in the areas you were deficient
to test your skills. The quiz represents a in. Once you have done this, a management
summary of the five resource categories where plan for the operation can be developed.
expertise is critical for agricultural managers.
Those categories are production, financial, Developing a risk management plan can be
marketing, legal and human resources. initiated by answering four questions: