The necessity for risk management tools and strategies are now greater than ever in the context of deteriorated climate conditions,the recent global food crisis, animal diseases outbreaks, higher price volatility and mounting consumers’ concerns about food safety issues as well as increased international integration and inefficiencies of agricultural markets . Appropriate risk management strategies benefit not only farmers, but also the entire society by supporting programs and targets for food security, increased employment opportunities and poverty reduction. Sustaining farmers in managing their risks represents a global gain for both rural and urban populations.

For centuries, farmers have been coping with risks ranging from the uncertainties of the weather, diseases and pests or other natural factors. The farmers’ situation may also be exacerbated by economic, institutional and social risks which tend to impact farm income, hamper investment and, in certain cases, obstruct the application of innovative practices. Farmers’ livelihoods, welfare and security are negatively affected as a consequence of this wide range of risks and, smallholder farmers, who often have limited resources, are particularly vulnerable.

Farmers around the world minimize and cope with risks in different ways depending on varying environmental, economical and social situations. Throughout history, farmers have been implementing good farming practices such as the diversification of crops and farm activities , the adaptation to new technologies and the application of safety measures helping them to cope with risks.

Farmers in developed countries are relatively better equipped with resources to manage risks, thanks to access to technologies and to a range of public and private systems and tools. In developing countries and economies in transition, producers are more exposed to risks, having less means to manage farming risks and often operate in a social context characterized by weak institutional and technical capacities. In those countries, risk management instruments are either non-existent or cannot be accessed by smallholders.