Five Key Principles of a Good Risk Management Culture
Managing risk in an agricultural operation is a daunting and never-ending task. While tools are available, such as marketing contracts and crop insurance, the information available is constantly changing, along with the uncertainty surrounding it. Agricultural operators are never truly done managing risk. Therefore, it is imperative that agricultural operations strive to create a good risk management culture where everyone manages risk on a day-to-day basis in a positive and timely manner.
There are five key principles that describe a good risk management culture within an organization: (1) the ability to anticipate decisions; (2) adequate resources and capacity to respond to changing conditions; (3) free flow of information into and throughout the organization; (4) a willingness to learn and adapt; and (5) risk management is embedded in all decision-making processes.
In this Center for Agricultural Profitability article, Farm and Ranch Management Specialist Jay Parsons reviews these risk management principles and how they can be applied to your operation.