Some Practical Aspects of Farm Risk Management

must choose between higher average returns and lower risks. R management implies different things for different people, depending on their attitudes toward risk, their financial situations, and the opportunities available to them. In some cases, managing risk involves minimizing risk for a given level of expected output or revenue. In other cases, it involves keeping risk within bounds while seeking higher expected returns. More generally, the goal of risk management is to obtain the best available combination of expected income and income certainty, given the individual’s resources and risk preferences.