As an entrepreneur, you find yourself being challenged by diverse hazards at different times.
Some of the common risks cut across production, sales and marketing, finances, government policy, and personal.
Agricultural risk management involves the different decisions/steps you take to reduce or manage some of the risks you encounter in your business.
How can you manage these risks?
In the absence of adequate information, you can become vulnerable and may take decisions that will complicate the business process.
To avoid this, seek professional advice from experienced farmers and traders before making your decision.
To effectively manage the hazards you may face in your business, you must be willing to source relevant information that will help you make strategic decisions.
Secondly, always have a strategy, especially for the legal and financial aspect of your business so that you won’t be caught unawares.
Another major risk that most agricultural businesses face is ‘marketing risk’.
You will observe that sometimes, the prices of raw materials and even the present product in the market face uncertainties.
Whether or not the price will be perfect for the crops after production, you, most times can’t say, especially with the current fluctuating economy.
A good way to combat this risk is to sell directly to final consumers. You can also register on platforms like Viable X that connects you with buyers for your product, thereby reducing risks and maximizing profits.
Ensure that the demand exceeds supply so you won’t run at a loss.
Finally, always put your ears to the ground for new information and product knowledge so that you can diversify when the need comes.