In this module, you’ll learn about what risk is, and how to conduct a risk analysis for your farm business. 

Risk management is an important part of the business planning cycle - it gives you the knowledge you need to be able to plan for uncertainty, which can increase the resilience of your farm business.  

The 'Now-Where-How-Review' Business Planning Cycle - find more detail on page 2 of the QuickPlan workbook. 
Once you’ve completed the activities in this module, you’ll be able to: 
  • Conduct a risk analysis for your farm business. 


To complete the activities in the module, you'll need:
  • Your Our Farm, Our Plan (OFOP) Online Course Participant Guide
  • Your OFOP QuickPlan booklet
  • A blank Risk Register (found in your OFOP folder)

Let’s begin by thinking about why we would manage risk. 

Think back to Module One and the three levels at which we we think, plan and make decisions: 

Operational decisions are the day-to-day ones we do all of the time. They are important – our overall performance is the result of a lot of good decisions over time.
Tactical decisions have a longer time frame and involve us making choices to respond to conditions that might change, such as how we will manage the season ahead.
Strategic decisions are the ones we make about our purpose and direction. They are the long term ones that, compared to the others, have a bigger impact on achieving our long term goals.

Considering the complexity of decision making for a farm business, do you think that farming is a risky business? Why or why not?    

In this TEDTalk, Chris Davenport explores the concept of risk management. 

Click play to begin the video. 

The story recounted in the TEDTalk focuses on the risks presented in mountaineering – but how do the ideas of risk and risk management relate to dairy farming? 

Click 'play' to start the clip below:

 

 

So, how do you think about risk? When it comes to risk are you: 

  • Risk averse 
  • Mildly risk averse 
  • Neutral 
  • Comfortable with risk 
  • Prefer to take a risk 
Do all the decision makers in your business think about risk in the same way? 
Discuss your approach to risk with your business partner/s. Are you on the same page when it comes to how you approach risk? What are the benefits of being on the same page? How might approaching risk differently be beneficial? 

Managing Risks in Your Farm Business

In this section, you'll conduct a risk analysis for your farm business.

Below is an example of how a risk analysis might look:

You can also find this example on page 9 of the QuickPlan booklet. 

Use the Risk Analysis Template found in you Our Farm, Our Plan pack to analyse the key risks to your farm business (or click here to download an editable PDF version).
The prompts below could also get your thinking started:

  • What key risks to your farm business did you identify using the Farm Fitness Checklist? 
  • Are there any risks that may impact on whether you can achieve your vision and goals? What are they? 
  • What other risks are there to your business? 

If you’d like, step away from your computer and take a walk around your farm to observe any risks that should be included in your risk analysis. Then, come back and have a discussion with your business partner/s about how you might go about managing each risk.  

Once you’ve completed the risk analysis, be sure to keep it on hand. You’ll spend some time reviewing it during your next online workshop. 
 
Click here to access several videos that provide information on how to mitigate, eliminate, accept or transfer a variety of risks presented by a dairy farm. Don't feel like you need to watch all of the videos - just the ones that will help you to address the risks you've included on your risk register.  

Module Five Review

In Module Five, you explored the idea of risk, what risk looks like for your dairy farm business, and how you might go about managing those risks. 

You've covered how to:

  • Conduct a risk analysis for your farm business.  

 
Don't forget to attend the online workshop for this module! You'll be covering the following with a group of peers and the course facilitator: 

  • Share your understanding of how the ideas of risk and risk management relate to dairy farming 
  • Share the key points of your discussion around how you approach risk
  • Share and review the Risk Analysis that you conducted for your farm business.

Last modified: Thursday, 12 November 2020, 2:00 PM