Risk Management Plan Helps Mitigate Threats
A Risk Management Plan Helps Mitigate Threats
I’m KayDee Gilkey with the Northwest Farm and Ranch Report after this.
In today’s global agricultural economy, farmers and ranchers’ risks are expanding and often becoming more volatile. Developing a risk management plan can help ag producers anticipate and mitigate risk, thereby reducing the possible negative impacts.
John Phelan, Northwest Farm Credit Services Executive Vice President and Chief Risk Officer, shares that there is more to a producer’s needed risk management plan than just purchasing crop insurance.
Phelan: “First of all crop insurance is an important part of a risk management plan but it is only one piece of that risk management plan. So it is really important as you look at your business, you look at it in whole. Try and make sure you are addressing all the different risks that faces your company. Now can you identify every risk that faces your business? Probably not, but you should at least go through a process to identify the four or five key issues that my business faces this year, that if things go a certain way that could cause damage to my company. Then try to set up plans and follow through to make sure you are addressing those primary risk areas your company is facing.”
Northwest FCS has created an informative publication, Risk Management Planning Guide, as a resource for ag producers in the development their own personal risk management plan for their operation.
Phelan adds it’s important that once ag producers have a risk management plan in place to use it as a living document and review it regularly.
I’m KayDee Gilkey with the Northwest Farm and Ranch report on the Northwest Ag Information Network.