As a result of the pandemic, agribusiness operations face additional pressures and are:
- Rethinking and re-routing product delivery around restrictions
- Increasing direct or on-farm sales
- Refocusing resources (e.g., distilleries making hand sanitizer)
- Adjusting to new rules in order to continue operations while keeping everyone safe
- Coping with an increased labor shortage
Risk management strategies are developed to offer protection and have historically been dealt with separately and in the short run. Because of the interconnectedness of the ag industry, a risk framework that considers proactive strategies to address the complex dynamics in an integrated way could balance the short- and long-term profitability, health, vitality and adaptability of the operation.
An integrated, multi-disciplinary systems approach to risk management builds partner relationships and promotes continuous learning, which improves the capacity to make realistic plans. It further allows us to reframe problems or threats into lessons or opportunities, as well as identify resources and understand how to use those resources effectively.
The success or failure of an ag business is determined by the operation’s ability to manage risks. Using a risk framework can help address the unprecedented challenges agribusinesses are facing by:
- Preventing and mitigating issues
- Integrating best practices from a variety of sources
- Guiding educational, support, and public policy
- Guiding decision-making and program planning
- Providing new perspectives when making decisions about risks
- Applying risk management tools to build resilience over time
Understanding business goals, risk attitudes, expectations for the future, equity position, resources available, market availability and other factors are an important first step. For help mitigating your risks and navigating the current regulatory landscape, contact our team of agribusiness professionals.