Measuring Risk in Agriculture and Implementing Good Risk Management Policies

摘要

This article proposes an approach to risk management in agriculture that is based on a broad assessment of the full set of risks, tools and strategies, and identifies three different layers of risk that deserve different policy responses. For good risk management, the assessment and measurement of farming risks need to be made at the individual farm or farm household level and risks can be compared through their impact on the variability of income. There is evidence that the correlation among some risks, such as between input and output prices, can contribute to smoothing the impact of shocks on income. Government policies are part of the risk environment and they can discourage proactive farm risk management. Policy should preferably focus on assistance for catastrophic risks that are rare and cause significant damage. Governments also have a role in facilitating good information and regulation conditions for the development of market based instruments and other private solutions. The paper is based on Organisation for Economic Co-operation and Development (OECD) work under the project on risk management in agriculture, in particular the recent publication Managing risk in agriculture: policy assessment and design (OECD 2011), available at: www.oecd.org/agriculture.