We often hear that successful businessmen are those who are able to predict how the market will change and who have the strength and determination to act on it.

Such traits, however, are not enough to guarantee success in farming.  It is common knowledge amongst people who enjoy outdoor activities that the gods simply can’t be trusted to deliver perfect conditions. Growing crops and raising animals are not mechanical processes. Weather and animal diseases can easily interfere with the business of even the best farmer. So it is no wonder that risk has always featured heavily in farmers’ lives. It’s one thing is to say, “Nothing ventured, nothing gained”, but we should not forget that the best strategy is to hope for the best and prepare for the worst. This is where risk management comes into the picture.

Risk management is definitely not a topic that steals the limelight. But in its own quiet way, it is an essential tool for farmers. Most farmers already apply risk management. They use different tools such as particular farming practices, insurance, financial markets, cooperation with other farmers, and participation in the supply chain in order to protect themselves against unforeseen negative occurrences. But I still think we can do more, especially in terms of training and the use of farm advisory services.

European farming is extremely diverse, so the risks that farmers face are equally diverse. A recent report by the JRC on the use of agricultural insurance gives a very good illustration not only of risks in agriculture, but also of how different the situation is throughout Europe and the specific role insurance plays in helping farmers to deal with risks.

The world is constantly changing, markets have become more turbulent and the weather less predictable. So we need to constantly be on the look-out for new ways of managing risks in farming. We already have good risk management tools in the CAP, like direct payments, market mechanisms and certain schemes under rural development policy such as support for climate-related projects. But as I said before, we can certainly do more and do it better. That is why we have already begun reflecting on future policy tools and techniques that can help farmers create robust risk management strategies. I don’t expect to read about this work on the front pages tomorrow but for anyone interested in the future of farming, I believe it is worth investing some time looking into it.

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