Risk Identification in Crop Farming

Question: Write an essay on the risk identification in crop farming. Answer: Crop farming is a risky business as the farmers are becoming more commercial. The farmers are required to understand the risks to better anticipate with the problems as well as reduces the consequences. The Risk influences the production such as change in the weather as well as frequency of the pests. Using the Simulation Model, the performance of the crop within the regions are predicted where the crops are not grown before or not grown under the optimal conditions. This model also predicts the weather conditions to overcome with the climate and production risks. This report consists of identifying the risks that arise in the crop farming. It also reflects on the classifying the risks, preparing a risk register, risk breakdown structure and work breakdown structure. Further, the identified risks are mitigated using the simulation model for crop farming. Risk Identification Type of Risk Description of the risk Production or Climate Risk Crops performances are dependent on the biological processes that are affected by the weather, pests as well as diseases. Low rainfall leads to low the yields while the heavy rainfall could damage the crops. Equipment Risk The tractor used to produce the crops may breakdown that results into inability to harvest within time. It affects the yields (Parry, Carter, Konijn, 2013). Marketing Risk The change in the price of the farm products affects the supply of the product, demand of the product as well as its production cost. When the farmers are planting the crops, they do not know if the price will be reasonable for their product. In case of the low rainfall, the crops production is reduced and it results into rise of price (Reidsma et al., 2015). Financial Risk It happens when the money is borrowed to investment the business of the crop farm. It causes due to uncertainty concerning the future interests as well as ability to provide fund when required (Sage, 2015). Institutional Risk It arises due to unpredictable changes within the provision of the services from the institutions that maintain the crop farming. Uncertainty of the governmental policies affects the farming includes price support as well as subsidies. The food quality policies to export the crops, rules on the animal waste disposal as well as stage of price maintain payments give a major impact on the farm business. Risk Breakdown Structure Serial Number Risk Breakdown Structure 1.0 Production Risk 1.1 Requirements of the farm products 1.2 Use of technology 1.3 Complexity as well as interfaces 1.4 Performance of the crop farming as well as reliability 1.5 Quality of the products 1.6 Risk of change in weather conditions 1.7 Lack of knowledge of using the simulation model to forecast the weather conditions and drought of the area 2.0 Equipment Risk 2.1 New technology 2.2 New method of testing the equipments 2.3 Breakdown of the equipments 2.4 Back dated use of the equipments 2.5 Lack of maintenance of the farm equipments 3.0 Marketing Risk 3.1 Poor method of forecasting the current market 3.2 Uncertainties in the requirement of the farm products 3.3 Insufficient farm products 3.4 Subcontractor performance 3.5 Change in the rate of interest 3.6 Decline in the security 4 Financial Risk 4.1 Lack of funding for the crop farming 4.2 Uncertainties in the inflation of the firm 4.3 Changes into the rate of the labors working for the farm 4.4 In experiencing the estimators 4.5 Price fluctuation of the commodity 5 Institutional Risk 5.1 Changes in the regulation of food quality regulations to export the crops 5.2 Changes in the governmental policies 5.3 Rise in the level of price support payments Work Breakdown Structure 1.0 Farm planning 1.1 Land survey and acquisition 1.2 Preparation of the land for crop farming 1.3 Estimation of the time required 1.4 Forecasting of the weather 1.5 Research on the market price of the farm products 2.0 Planting of the crops 2.1 Procuring, planting the crops fertilizer, sprays 2.2 Procuring the building materials 2.3 Planting as well as fertilization 2.4 Irrigation as well as cultivation of the farm 2.5 Harvesting of the crop 3.0 Risk Management 3.1 Identifying the risks 3.2 Analyzing the risks 3.3 Risk register and risk classification 3.4 Mitigating the risks using the simulation method 4.0 Development of the farm planning 4.1 Development of the management plans 4.2 Development of the maintenance plans 4.3 Development of the risk management plan 5.0 Implementation of the farm planning 5.1 Visualizing the farm planning within the time frame 5.2 Final review of the plan Conclusion It is concluded that crop farming is a risky business and it causes some of the risks such as production, equipment, marketing, financial as well as institutional risks. Equipment breakdown is also a risk that can fluctuate the market price. Risks are also occurred due to change in the governmental policies. It gives a high impact on the income of the farm. Those risks are identified within the crop farming and it is analyzed using the simulation model. This model is used to assist the decision making process of the farmers. Using the simulation model, the climate risks are mitigated by understanding the probabilistic nature of the information regarding the weather change. It helps to estimate the frequency of the drought events. Lastly, it is required to improve over the operational assessment ability of the crop farming. It is identified that the pre-prediction of the weather conditions help to distinguish the areas where the crop should cultivate as well as harvested. References Parry, M. L., Carter, T. R., Konijn, N. T. (Eds.). (2013).The Impact of Climatic Variations on Agriculture: Volume 1: Assessment in Cool Temperate and Cold Regions. Springer Science Business Media. Reidsma, P., Wolf, J., Kanellopoulos, A., Schaap, B. F., Mandryk, M., Verhagen, J., van Ittersum, M. K. (2015). Climate change impact and adaptation research requires integrated assessment and farming systems analysis: a case study in the Netherlands.Environmental Research Letters,10(4), 045004. Rosenzweig, C., Elliott, J., Deryng, D., Ruane, A. C., Mller, C., Arneth, A., ... Neumann, K. (2014). Assessing agricultural risks of climate change in the 21st century in a global gridded crop model intercomparison.Proceedings of the National Academy of Sciences,111(9), 3268-3273. Sage, A. P. (2015).Risk modeling, assessment, and management. Y. Y. Haimes (Ed.). John Wiley Sons.