Improving farmers’ decision making around financial risks offers a wide range of benefits and opportunities, and is key to the economic stability and sustainability of the farming enterprise. Farming is a complex business and is best analysed in discrete parts, with the three key aspects of financial risk being real estate (“dirt”), machinery (“diesel”) and inputs (“dice”). By understanding the risks and returns on investment (risk-reward profiles) associated with each aspect of their enterprise, a farmer can focus on the part that will benefit their business as a whole, and adjust their decision making accordingly.
This component of RiskWi$e will focus on obtaining empirical data for analysis, together with insights into the behaviours that drive farmer decision making by:
- Delivering intensive workshops on financial risk management themes that are guided by growers and advisors and supported by professionals in decision making and finance.
- Benchmarking data on farm machinery purchases to understand the risk-reward trade-offs in these decisions, and from this insight, developing a machinery purchase decision support tool.
- Developing a framework for use by growers and advisors to assist with financial decision making and to support self-assessment of important investment decisions.
- Developing a decision support tool that can be used to scrutinise financial risk and develop strategies that not only manage risks but also drive growth opportunities.