Risk is ever-present in Australian agriculture. It is not a new issue for farm businesses and has in fact often been the driver for new ideas, innovation and change. However, the nature of these risks is constantly changing, and so the need to understand the tools available to address and manage these risks, and to ensure that the risk management marketplace matches the needs of farm businesses, is greater than ever.

This project aims to develop a better understanding of the risk exposure of Australian agriculture subsectors using available data, and to analyse a range of different options available for agricultural risk management. These options or tools include the adoption of different business models (for example forward selling or contract supply arrangements), the use of either domestic or internationally traded soft commodity derivatives, a suite of commercial risk products (such as named insurance; multi-peril crop insurance (MPCI) and weather derivatives) and farm business management strategies (enterprise diversification; high equity; alternative sources of income) as well as mutual funds and government programs. The advantages and disadvantages of each were analysed and discussed in a series of industry interviews.

The research culminated in the development of an assessment framework to compare different risk management strategies and the identification of potential initiatives which could facilitate improved risk management options for Australian agricultural businesses.

The research covers the following subsectors of agriculture:

• Beef cattle

• Sheepmeat

• Wool

• Grains (wheat)

• Pork

• Cotton

• Sugar

• Dairy

• Poultry (meat and eggs)

• Horticulture (fruits and vegetables)