Risk and Risk Management
As an introduction to risk and risk management, we recommend an excellent RMA fact sheet entitled "Risk and Risk Management." The four-page document outlines the fundamental principals of risk and risk management, including an explanation of three guiding risk management rules:
- Don't Risk a Lot for a Little
- Don't Risk More than You Can Afford to Lose
- Know the Odds
Whether you are new to risk management or just want to brush up on the basics of risk and risk management, this article is a great starting point.
Five Categories of Risk
The United State's Department of Agriculture's (USDA) Risk Management Agency (RMA) has defined and categorized agricultural risk within five categories: production risk, marketing risk, financial risk, legal risk, and human risk. An understanding of these risk categories is fundamental for producers seeking to successfully manage risk. We recommend the following three articles as a starting point for understanding the five risk categories:
- From National Crop Insurance Services’ Crop Insurance and Risk Management Primer, we provide an article by Dr. Laurence M. Crane entitled Risk Overview. (3 pages)
- From Colorado State University's Dennis Kaan, we provide "Risk and Resilience in Agriculture - An Introduction to Risk in Agriculture." (9 pages)
- From RMA, we provide "An Introduction to Risk and Risk Management." (20 pages)
Federal Risk Management Programs
We recommend National Crop Insurance Services’ Crop Insurance and Risk Management Primer as a comprehensive introduction to Agricultural Risk Management and Federal Risk Management Programs. Sections of the Primer document are included as recommended reading for many of the Learning topical areas.
The National Ag Risk Education Library and four regional risk management education libraries are funded by the USDA to improve producers' access to risk management education content and tools. Each library has an extensive online collection and excellent search capabilities.
National Ag Risk Education Library at the University of Minnesota;
Western Center for Risk Management Education at Washington State University;
North Central Risk Management Education Center at the University of Illinois;
Northeast Center for Risk Management Education at the University of Delaware;
Southern Region Risk Management Education Center at Texas A&M.
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