-Every decision involves some risk, so risk needs to be incorporated into the decision process.
-The goal of risk management is to balance a farm's risk exposure and tolerance with the farm's strategic and financial objectives.
-Risk can be described as coming form five main sources: production,marketing,financial,legal,and human resources.
-In order to decide which risks need attention first,sources of risk can be prioritized by considering their probability of happening along with the potential impact. Those risks that have a large potential impact and a high probability of happening need immediate attention.
-Risk can be managed or handled in one of five ways: retain risk, shift risk, reduce risk, self-insure, or avoid risk.
-A manager has many specific option for managing risks including,insurance,hedging,contracting,diversification,and financial reserves.