Risk and uncertainties are ubiquitous and varied within agricultural supply chains. These result from a range of factors including the vagaries of weather, the unpredictable nature of biological processes, the pronounced seasonality or production and market cycles, the geographical separation of production and end users, and the unique and uncertain political economy of food and agriculture, both domestic and international. Given the pervasiveness of risks, and massive structural changes in global and national agri-food systems, farmers, agribusiness firms, and governments face new challenges in the design of risk management strategies.
Long-standing ‘traditional’ tools for managing risks frequently focus on addressing one type of risk faced by particular stakeholders (e.g., weather risk facing farmers, price risk facing traders), even though supply chain actors are typically inter-dependent and need to manage several different types of risks. The effectiveness and/or financial sustainability of many ‘traditional’ risk management interventions has been problematic and has tended to be incompatible with changing patterns in agri-food systems.
The Agriculture Risk Management Team has developed a conceptual framework and set of detailed guidelines for conducting systematic assessments of risk and vulnerability within agricultural supply chains. The Rapid Agricultural Supply Chain Risk Assessment is designed to help decision makers understand the risk exposure of agriculture supply chain participants and to identify risk management strategies for selected commodity systems. This diagnostic tool focuses on the types of risk, level and frequency of exposure, severity of potential losses, and alternative risk management solutions for individual chain participants and sub-groups within the chain. The essence of the assessment is to understand the wide range of ‘bottlenecks’ and ‘choke points’ that affect different participants and functions related to a given agricultural commodity system. The assessment is devised as a consultative and time-bound process geared toward providing a ‘first approximation’ of key vulnerabilities and areas requiring priority attention in investment and capacity building.