Risk and uncertainty are inherent to agriculture. The most common sources of risk are weather, climate, diseases, natural disasters, and market and environmental shocks. Other risks relate to logistics, infrastructure, public policy, the political situation and institutions. Some risks have become more severe in recent years due to climate change and the volatility of food prices.

Smallholder farmers’ livelihoods are especially vulnerable. They may have difficulty in assessing and managing risk, and fail to benefit from investment opportunities that could improve their farming businesses and strengthen household resilience.

Agricultural Risk Management (ARM) is an innovative approach for improving the resilience of vulnerable rural households, and leveraging finance and investment. ARM allows farmers and businesses to be pro-active and increases their capacity to assess, prepare for, absorb and adapt to risks.