RISK MANAGEMENT

"Risk management in its broadest sense

involves the identification, estimation,
assessment, monitoring, evaluation, and
control of risk, including preventative,
reactive and unorganized processes to
deal with them. Institutions for this
purpose include courts, legislatures,
administrative agencies, business
enterprises, labor unions, research
institutions, citizen groups, and
 Types of Risks in Rural
Marketing

Natural Causes like destructive winds, heavy

rain-floods etc.

Man Made Causes like strikes, theft, etc.

Reduction in Values due to quality

deterioration, price variation due to
changing consumer preference, price
variation due to delays, due to changes in
market environment, due to low
productivity, etc.
 Risk Coverage Methods
Self Insurance.
Price Regulation Mechanisms by the Government.
Risk Sharing by federation groups.
Insurance Coverage – Agricultural & Livestock.
Futures Market – Pricing & Delivery on diff. days. Physical
presence of the commodity is not necessary.
Hedging – Equal & Opposite transactions on the cash and
futures market to protect against adverse price
movements.
Forward Contracts – Delivery for future at fixed prices.