Managing risk is inherent in agriculture. Producers – and the sector as a whole – are confronted with production risk due to fluctuations in weather, market risk due to price volatility, financial risk resulting from the need to borrow funds to finance operations, and institutional or political risks from changes in policy. But even for a sector accustomed to risks and employing measures to manage them, farmers and other actors continue to be confronted with new and unknown risks that threaten farm businesses, supply chains, and even food security, eliciting emergency responses from governments and sector actors seemingly caught off-guard. At this writing, the largest global pandemic in more than a century, COVID-19, has disrupted the sector in unexpected ways, cutting off producers from seasonal labourers, affecting the wellbeing of workers in food processing plants, and even virtually shutting down certain supply chains as lockdowns severely curtailed restaurant and hospitality sectors.

The agricultural risk landscape is shifting, with producers increasingly confronting new sources of risk caused by a changing climate, unanticipated changes in policy, or the economy-wide effects of shocks external to the agricultural sector, such as the global COVID-19 pandemic. Confronting this landscape will require disciplined application of an holistic risk management strategy – specifically, ensuring that decisions are no longer made from a paradigm of reactivity, but from a more proactive “resilience” perspective instead. This implies focusing on preparedness, with the goal of either reducing the negative impact of events, or significantly reducing the likelihood that those events occur.

Some significant sources of risk and uncertainty are increasing for the agricultural sector, and the financial impacts of adverse events is rising. Consequently, there is a need for farmers – and the agricultural sector more broadly – to become more resilient. Resilience can be understood as “the ability to prepare and plan for, absorb, recover from, and more successfully adapt and transform in response to adverse events”, which in agriculture can include market volatility, more variable weather conditions under climate change, pest and disease outbreaks, natural disasters, and even events external to the agricultural sector, such as pandemics. Resilient farmers and systems are able to absorb the impact of such adverse events (including mitigating or preventing impacts), adapt to an evolving risk landscape, and transform the type of farming system – or even the agricultural sector itself – if the current system is no longer able to adapt to or recover from shocks.