RISKY BUSINESS AT HARPER ADAMS

Posted 3 November 2003

By Fiona Haile

THE MANAGEMENT OF FARMING RISK Conference was attended by 90 delegates and took place on Wednesday, October 29, 2003 at Harper Adams University College, Shropshire.

The conference was the first in a series of seminars on risk management strategies and techniques to be hosted by the College; examining all areas, enabling farmers to consider how to adapt their businesses to changing circumstances.

Guest speaker Barry J Barnett, of the University of Georgia, explained the strategies in place in the USA, and how the vast geographical and climatic differences meant that there cannot be a universal plan for all aspects of risk, such as Crop Insurance. He commented that individuals have different tolerance levels and that risk is not always a negative component of business: entrepreneurs always take risks!

The US is ahead of Britain in terms of risk management, but much work is being done to progress in this field, as explained by Barrie Florey, Head of Rural Affairs and Environment at Harper Adams. Barrie defined risk management as “everything that you do that can impact on your bottom line and your long-term growth in net worth.”

He also clarified that the aim is not to eliminate risk but to manage it effectively, and summarised the steps involved as identification, evaluation, treatment, implementation and monitoring.

Christine Tacon, General Manager of Farmcare spoke from the perspective of the larger scale co-operative farm, and emphasized the need to plan ahead, identifying the internal and external factors which will affect the business, and be prepared for political, operational, financial and labour circumstances, classifying them as high, medium or low risk.

Christine suggested compiling a business plan and regularly reviewing it with the aim of keeping ahead as much as possible. She also recommended that farmers should collaborate to protect themselves, maintaining that co-operation is the way forward.

As part of the conference proceedings, delegates chose from a selection of workshops: practical steps in risk identification and management, profitable marketing, insurance and tax planning and human resource policy. These areas and more will be expanded upon in a series of workshops from Spring 2004 onwards.

The subject of risk management is one that is often brushed off, as so many circumstances cannot be predicted, such as the recent Food and Mouth epidemic. The forthcoming seminars will be presented in detail, with practical advice for farmers on ways to improve or build upon their strategy, using the advice given as a tool kit to analyse the business in order to work out the solutions.

Risk Management specialist Barrie Florey said: “The benefits of risk management are to potentially increase the value of a business, whilst positioning it for future growth, but on-going monitoring is vital to the long term success.”

Barrie emphasized that annual reviews are no longer enough, and more frequent evaluation measures must be in place to be able to revise plans quickly when situations change.

For further information on risk management policy strategies, contact Barrie Florey on +44 (0) 1952 815 346 or to book a place on the workshops, contact Carole Hinks, on +44 (0) 1952 815324.

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For further information please contact Barrie Florey on +44 (0) 1952 815 346 or E-mail bflorey@harper-adams.ac.uk