← agribusiness-risk-management-030524.pdf
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Goal of Presentation
To give you an overview of the sources of risk and risk strategies to improve outcomes of Agribusiness.
To discuss some do's and don'ts, strategies and resources to minimize your risk while maximizing your potential to make money, hire staff, sell more, lose less, and increase customers.
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Source of Risk: Overview (Cont.)
Thinking of starting a new enterprise?
The answer to these questions can help you discover any limited resources you might encounter.
What knowledge and management skills do I need?
What are added labor needs?
Where are the markets?
What does your answers tell you?
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Source of Risk: Financial Risk (Cont.)
Cost and Availability of Debt Capital
Money or capital that comes from sources outside of the operation such as bank loans
Work with your lender to create a solid relationship and reduce your financial risk when:
a.) There's an increase in interest rates or interest expenses from variable rate loans
b.) You need to borrow and access credit to maintain flexibility
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Source of Risk: Financial Risk (Cont.)
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Source of Risk: Legal Risk (Cont.)
Contractual Agreements are part of the day-to-day management of most agricultural businesses
The five types of contracts that can affect your legal risk are:
Leases or crop-share arrangements
Federal program agreements
Insurance instruments
Labor
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Source of Risk: Legal Risk (Cont.)
Tort and tort-liability law is primarily concerned compensation to someone injured or damaged by a wrongful act or omission
Include acts of:
Negligence or intentionally caused damage related to:
Farm injury
Farm discharges
Non-disclosure of known farmstead hazards
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Source of Risk: Legal Risk (Cont.)
Statutory compliance is defined as meeting regulations imposed by government agencies on your operation
Statutory compliance risks arise from the failure to follow regulations governing the operation of your business
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Source of Risk: Human Resource Risk
Human resource risks may arise when business activities require working with other people. These would include but are not limited to personnel issues such as:
Hiring and/or firing employees
Injury, illness, or death
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