Workshop shows how to manage climate risk

By Dr Amir Abadi

Farmers experience the highs and lows of climate and markets. There is an increasing array of options to manage their land with annual and perennial crops and pastures. New products emerge to offer alternative ways to manage credit risk and the volatility of commodity prices. Research offers novel climate forecasts and outlooks with increasing sophistication.

But for many farmers, and those who provide them with research and advice, the choices and alternatives can be very confusing. The opportunities seem numerous and complicated. They are often shrouded in jargon like enso-states, analogue years, contracts for futures, puts and co-production, margin calls, pools, just to name a few.

A training workshop exists to help people steer their way through the thicket of jargon and mystique and use the knowledge for better management and higher profits. Called "Risky Business", the interactive workshop integrates climate and price risk management into the broader management of the entire farm business, including its natural resource base.

Risky Business was created to improve people"s understanding of how price and weather variability affects farming and in turn how farming affects its own land and water resources. These workshops are unconventional in the sense that they immerse participants in a fun, interactive and groupbased learning environment.

During the workshop participants form partnerships and take on the role of being the virtual manager of a farm. They make a range of management decisions in the face of price and seasonal uncertainty, and experience the pain and pleasure of volatile farm profits.

No experience is required in farming, agronomy, finance, accounting or computing. Participants are assisted all the way by experienced facilitators. User-friendly software stores players" choices and decisions. The tool then displays the financial and hydrological consequences of their management choices. Within each partnership the members share and collaborate.

There can also be fierce competition between the virtual farmers throughout this day-long workshop.

A grower who has attended the workshop says: "I believe this is a great tool to learn more about risk. I enjoyed today"s really interesting, informative and hands-on workshop."

A farm management consultant says: "A great strength of Risky Business is the wholeof- farm approach. No other workshop in my experience offers such a comprehensive integration of the farm business impacts of risk management on capital and financial resources. No other workshop so clearly illustrates the real profitability drivers of farm businesses."

A typical workshop program includes:

For more information: Risky Business workshops can be presented on request. Dr Amir Abadi, the originator of the workshop, may be contacted via aabadi@agric.wa.gov.au