FEATURES OF RISK MANAGEMENT IN THE VALUE CHAIN OF AGRICULTURAL PRODUCTS

Abstract

The article substantiates that risks in the agricultural market are systemic and interrelated: production disruptions reduce sales volumes and complicate contract performance, price fluctuations determine revenues and cash flows, and financial conditions affect the ability to finance technologies that reduce production losses. The methodological basis is the FAO approach, which views risk management as a sequential process of identifying risk sources, determining possible outcomes, developing alternative strategies, assessing their consequences, and choosing a trade-off between risk-management costs and expected benefits. It is shown that there is no “universal” solution in agribusiness: insurance requires a premium, storage entails warehousing and financial costs, hedging involves transaction costs, margin requirements or option premiums, and diversification increases managerial complexity and may reduce maximum profit. The practical significance of risk classification as a tool for structuring uncertainty and forming a portfolio of complementary strategies is demonstrated. The key groups of risks are systematized: production and technical risks (weather, pests, technological failures, and “upfront investments”), marketing risks (price and sales risks, seasonality, logistical constraints, contract risks), financial risks (liquidity, credit conditions, seasonal cash gaps and the “double hit”), institutional risks (changes in rules, infrastructure, and service quality), and human risks (personnel issues, occupational safety, managerial errors). The role of price risk and the instruments for hedging it forward contracts, futures, and options as well as combined strategies (layering, minimum price, collar) is examined separately. It is concluded that an integrated approach makes it possible not only to reduce individual risks, but also to prevent cascading losses throughout the entire production and marketing cycle.