The thorny issue of how farmers and other rural businesses can identify and mitigate different types of risk is addressed in a new guide published by Lloyds TSB Agriculture.
'The Signpost Guide to Risk Management' groups the risks faced by farming businesses into five broad categories. The guide covers: financial risk, both internal and external; personal or human risks; production risks including weather, climate, disease and pests, as well as equipment, labour and operational issues; marketing or price risk; and finally institutional risk which is an all-embracing term to include all the external constraints and incentives society places on farmers
Commenting on the launch of the guide, Peter Sobey, Head of Agriculture at Lloyds TSB said:
"Farming is a risky business and farmers have been dealing with those risks for generations, often on an ad-hoc basis. But as the industry's 'safety-nets', such as EU market support, phase out, there is a need to look at risk management in a more systematic way.
"This guide attempts to do that. By grouping risks into broad categories it makes it easier to identify the risks and helps to quantify them by posing a number of fundamental questions. It asks farmers to assess the probability of any particular event happening, if it happened what would be the likely impact, can the risk be reduced and what is the cost of doing so?
"Finally the guide suggests ways the risks can be managed in order for the farm business to prosper," he said.
The 'Signpost Guide to Risk Management' is available from your local Lloyds TSB Agricultural Manager or by calling the following numbers - South West: 01392 424871; South and South East: 01227 462056; Wales & West: 01432 355295; Midlands: 01889 566563; North: 01522 539374 and Scotland: 0131 226 7009.
