The Primer Series on Insurance provides a summary overview of how the insurance industry
works, the main challenges of supervision, and key product areas. The series is intended for
policymakers, governmental officials, and financial sector generalists who are involved with the
Agricultural production faces a myriad of risks. Nevertheless, two
major risks are of concern to the agricultural sector—price risk caused
by potential volatility in prices and production risk resulting from
uncertainty about the levels of production that primary producers can
achieve from their current activities. It is likely that these major risks
will increase in the future—price risk due to liberalization of trade
and production risk caused by the effects of climate change. The trend
towards agricultural specialization is likely to continue which will
increase these risks as producers rely on the production of a smaller
range of crops and consequently cannot diversify risks as effectively.