Low Risk Agribusiness: Risk Factors and Their Management

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Low Risk Agribusiness Model– A start-up with heavy business model i.e., high investment and high risk has more chance of failure than a start-up with light business model and low risk. Low Risk Agribusinesses are always the first choice for beginners in the field of agriculture and its related sectors. Risk Factors Involved in Agribusiness are natural and man-made. Low Risk Agribusiness requires low investment and smartly done management practice. Here we will also know about some Low Risk Agribusiness Model.

Low Risk Agribusiness: Introduction

Farming business in agriculture is common practice around the world. Like other professional business It also has lots of risk factors. Generally people don’t want to take risk. They don’t adapt it quickly. According to leadership there are four type of people,

Agriculture is a profession raw products. So, risk is always high weather it is food production or food processing. There are two types of agribusinesses, one with low risk factors and another with high risk factors. New farmer or agribusiness man should always start with a low risk factors.

These low risk agribusinesses have little or no chance of failure. Risk can be managed with a little knowledge. High risk agribusiness like dairy and poultry farming have high rate of failure in the field of agribusiness.

In modern agriculture agriculture student, agriculture professional and advanced farmers are adopting agriculture as business. Most of the time they couldn’t get success without proper understanding of risk factors involved in agribusiness.

Importance of Low Risk Agribusiness

  • Initial investment is low.
  • Risk can be managed easily.
  • Losses are of small scaled and bearable.
  • Good concept for beginners and small farmers.

Different Agribusinesses With Low Risk

In agriculture there are different low risk agribusiness. These are as follows:

  • Mass production of Compost and Casing.
  • Commercial production of mushroom.
  • Commercial fodder production.
  • Establishment of commercial plant nursery.

Mass Production of Compost and Casing

Compost – Composts are organic fertilizer. There are different types of compost e.g., Farm Yard Compost (FYM, गोबर खाद- in Hindi), vermicompost, green manure etc. Procedure for the production of each organic fertilizer is different.

Casing – Casing is humus material prepared from the different organic substances. It is widely used in the production of white button mushroom.

Why is it important?

Demand of organic fruit and vegetables is increasing day by day. Produced compost are sold directly to farmer or big agriculture farms and government institutes. It is going to be very profitable agribusiness in future.

Why is it low risked?

  • All required materials are available locally.
  • Initial investment is low.
  • No advanced knowledge or technology is required.
  • Less management is required.
  • Not affected by the weather conditions.
  • No harm from insect-pests.

Note: No major or minor risk factor is involved in composting.

Commercial Production of Mushroom

Mushroom production is a very profitable agribusiness model. It requires less time and money. Cultivation of paddy straw mushroom, Oyster mushroom and white button mushroom is very profitable.

Why is it important?

  • Low investment.
  • Fast growing.
  • Less number of labour.
  • High market rate.

Why is it low risked?

  • Micro climate can be created during adverse weather conditions.
  • Attacked less by insect-pests.
  • No heavy loss in a single crop.

Other Risks and their management

Sudden change in temperature i.e., high or low temperature can be controlled manually.

Commercial Fodder and Feed Production

Fodder production in agribusiness faces low risk factors. Fodder and feeds are produced for poultry, fisheries and dairy farming.

Why is it important?

  • Demand of fodder and feed like standard poultry feed and silage is high.
  • Profit margin is high.
  • It is an evergreen agribusiness.

Why is it low risked?

  • Crops are grown only for fodder and grain such as berseem, elephant grass, maize, chickpea etc.
  • Economical damage done by insect-pests can be covered by high market price.

Other risk factors involved and their management

Standing crops can be attacked by insect-pests. Proper management is necessary for high yield.

Establishment of Commercial Plant Nursery

Ornamental plant, vegetable plants, fruit plants, spices and medicinal plants are propagated and grown in a plant nursery.

Why is it low risked?

Other Risk Factors Involved and Their Management

Never establish a commercial plant nursery in leased land. Land holder can betray later on. Always use your own land.

Model For Low Risk Agribusiness

We can use some agriculture or farming model to reduce the overall risk. Using these models, loss can be minimized and damage can be recovered. These are,

Last Updated: 28-03-2021.

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