ABSTRACT
The choice an agribusiness makes on whether and which risk management strategies to use is dependent on both risk attitude and risk perception. Risk attitude is the actor’s orientation towards or willingness to take risks. Agribusinesses also face the same kinds of economic risks as virtually every other business. Effective infrastructure helps agribusinesses manage risk. The need to share information, manage inventories, maintain food safety and add value characterises all agribusiness supply chains. Conventional derivative markets have only filled part of the risk management function for the majority of agribusinesses. Production risks refer to the possibility that yields and/or outputs are lower than expected. The Food and Agriculture Organisation identified a number of different ways in which public-private partnerships agreements have been used to manage risk. Managing risks starts at the farm level, where farmers have different strategies to stabilise their income.
