Risk Management Strategies


Farming is one the most important business for any country. Farming business fulfills day today needs of every individual. There are several businesses in farming such as agriculture, fisheries , dairy farming etc. In the report we have chosen Dairy farming business. It is a part of agriculture that deals with milk production accompanied with milk processing at dairy farms or dairy plants (Moran, 2005). Need of milk is never ending. They are rich in high producing dairy cows. Other animals are also used other than cows in farming business such as ships, goats, camels, buffaloes etc. Milk products enterprise has been chosen in the study. Effects of climatic conditions on farming business will be studied.

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Task 1

1. Describe the farming business and outline the major climatic problems affecting the enterprises in the business.

Farming is one of the most important sector in Victoria. Farming business to be successful needs clear and complete understanding of the firm. It is required to understand what it is about and the scope of the firm in future. In the competitive world, it is required for the firms to recognize strengths of competitive firms and accordingly develop planning to maintain competition in the market. Dairy farming is one of the most common business everywhere around the world. Demand for milk is never ending. Climate plays crucial role in farming business. But, there are certain climatic factors that affects dairy farming business in Victoria.

Environmental impact

In Victoria , there is emission of greenhouse gas which is almost 10% to 16% and dairy farms contributes 3% of overall emissions. Temperature changes and availability of water directly affects pastures and crops. Their quantity as well quality degrades. The grains required to be fed to animals gets affected . Use of pesticides leads to several diseases. Pollution of water and land affects quality of crops.


Climate variability has direct impact on the farming business. If natural disasters like droughts occur frequently farmers would be more vulnerable (Armstrong and, 2000) .On the other hand, If there is plenty of water flood will cause destruction all around causing lack of food for animals which will impact production of milk.


Victoria has hot summers, mild autumns and chilling winters. Temperature of the surroundings in which animals are producing milk has a significance importance. A minimal temperature is required by animals for better production of milk. Excessive high and low temperature would affect health of animals making them weak or affecting the amount of milk they produce.

Task 2

2.1 Has the climate changed over the 20 years? Have the temperatures risen or rainfall increased? Are there any patterns or trends?

According to the report, climate has changed over last few years in Australia. It has become hotter in last few years due to increase in pollution. Increase in bush fires and droughts have been encountered (Earle and, 1979). Australia has come across annually 1°C increase in temperature and the rate of heat increase is twice of it. Extremely rise in temperatures and drought regions has been increased in last few years.

2.2 How has, or how will, the recent climate affect your enterprise or the one you plan to have in the future? (If you don’t have an enterprise use pasture or crops and sheep or beef cattle).

Climate change has direct impact on on farming business. If temperature would increase at these rate ,cultivation of crops will get affected. Each crop has certain requirements of temperature to cultivate and grow (Lee and, 2013). Thereby, animals would not get their food which will ultimately affect milk production and enterprise as well. Increased temperature will lead to decrease in rainfall and thus affect agriculture.

Task 3

3. Provide a brief outline of the SOI (Southern Oscillation Index) and indicate the likelihood of above or below average rainfall for your farming area.

Strengths and the potency of the Walker Circulation can be measured by using Southern Oscillation Index. SOI is one of the important atmospheric directory to measure strength of events El Nino and La Nina. It is also used to measure impacts on regions of Australia. Among Darwin and Tahiti surface air pressure differences can be measured by SOI (Allan and, 1991). Difference in monthly averages can be best represented by the index. Factors involved in fluctuation of values is due daily changing weather and it is most likely to happen due to tropical cyclone.

Consequences of El Nino

Twists going between atmosphere and ocean Have adverse effects on climate. Wind patterns are affected by changes in tropical rainfall. Air flow gets affected by dense clouds. Monsoon position is determined by the air waves in the direction it flows. Air waves gets affected when rain area is centralized at Indonesia and Western pacific moves in east direction towards central pacific. It therefore leads to obstructive weather.

Benefits of El Nino

Noways scientists are using numerical prediction models to analyze processes occurring in nature. These models constitutes basically numbers and digits that describes current status of atmosphere over oceans. They make observations for wind speeds and sea level. They also identify ocean currents. Set of numbers can be used to analyze prediction of weather over next few years. Thus, prevailing conditions of atmosphere and rainfall can be identified.

Average rainfall in Australia according to SOI is 513mm per year. Many times some regions of Australia receives heavy rainfall whereas some regions receives average rainfalls. Once atmospheric conditions are predicted by weather forecast it helps farming business to identify what crops to sow to get maximum profits.

Task 4

4. Climate Risk and Opportunities

Farming is basically dependent on the risk of climate. The main production business is totally dependent on the climate risk. The variability of the income is also a change in economic climate which will affect the farm business (Kunreuther and, 2013). There are certain factors of climate which can affect the farming as well as the dairy business.

  • Temperature: There are various plants, that will not be able to grow properly, if the change in temperature take place, especially if it will increase. This increase in temperature will make the grass and plant dry, and there will be absolute nil protein left in them. The feeding of the animals will not be proper and the quality of the milk produced by them will not be good.
  • Growing Season: There are number of days between the frost and spring is increased. This is because of the global warming. This will put a major impact on the development of grass.
  • Rainfall: The major factor to grow a plant is water. The average temperature will be more, than to grow a plant more quantity of water is required. And for plants to grow, less quantity of water is required. If heavy rainfall takes places, then all the plants will be destroyed and the animals will not be able to eat properly. This will result in lowering the quality of milk produced by them.
  • Heavy Wind: More than desired wind can have very destructive effect on crops. In Australia, mostly hurricane takes place and that can destroy acres of area of land where farming can be done. Winds can dry the soil and there it will be difficult to plant again.

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All these factors put some significant effect on farming (Woodward, Kapelan and Gouldby, 2014). But the main opportunity is that all the plants are starts changing according to the climatic condition. This will be very helpful in feeding those plants to the animals and getting quality products.

Task 5

5.1 Risk assessment using risk matrix

Step 1- The main area is Victoria, and the main interest is increasing the farming business so that better quality of milk can be produced.

Step 2- The major impact on any organization is put up by the changes in the climate. In Victoria, the major impact is put up by the hurricane or we can say heavy wind. This can destroy a large area of farming zone (Aerts and, 2014). So it is advisable to grow such kind of plant which can survive this type of situation and after consuming those plants, the animals can give high quality of milk.

Step 3- Most likely changes in climate will be wither increase in the temperature or the rainfall which can be heavy and that can destroy plants very severely.

Step 4-

  Elements Priority
Production Drivers Animals, the plants they consume High priority
Natural Resource Drivers Weather, rainfall, winds Slightly less priority

Step 5- The complete framework will include different climate variables like the different seasons of climate eg. Spring, raining, summer, winter etc.

Step 6- The impact of changes in climate will result in the lower production, less quality of products. More investments in improving the new technology to adept to those changes (Jabareen, 2013).

Step 7- The heavy rainfall will be almost certain, where as the increase in temperature is very unlikely. Very less temperature during winter is slightly possible.

Step 8- The consequences will be certainly drop in the production and quality of farming products.

Step 9- The impact of risk matrix will be almost certain. All the positive consequence will put extreme impact in the condition of the business.

5.2 Vulnerability Matrix

Step 10- The adaption of new techniques will certainly reduced the impact of the weather and the climatic conditions.

Step 11- The adaptation responces will be low, because it will be very costly for the business to adapt such new inventions (Eakin, Lemos, and Nelson, 2014). But in farming, it can be medium by varying some changes here and there.

Step 12- Level of vulnerability will be medium, because the adaptive capacity is low, and in some cases it is medium.

Step 13- Adaption capacity will be low

Task 6

6. Risk management strategy

There are some adverse impact of the changes in climate to the agriculture. There are different changes in the length of each season and then the changes in the temperature. Sometimes the changes in these climatic condition will increase the availability of water, this will increase the productivity in agriculture.

There are some adaptive approaches which can be used to reduce the effect of climate changes (Koks and, 2015). Adaptive strategy can be done where the necessary actions are required. There are few approaches we can apply in adaptive strategy, they are as follows;

The Integral approach: This approach can be used where the integral methods are applicable like change in the water sources, or the whole water cycle about how to give water to the plants. The water quantity is calculated in each part of the farm, where it is required or not. The quantity can also be distributed in the correct form, so that the extra wastage of water is reduced.

Flexibility: The flexibility will be related to the changes in the resources of the farm, whether they are related to technology or water (Francesch-Huidobro and, 2016). Some times it can be related to the financial changes as well.

Local conditions: It can help in the adaption of new techniques. The local market can also affect the performance of the farm.

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From this report, it has been concluded that, the climatic condition can put a huge impact on the performance of farm. There are various matrices, by the help of which we can identify the risk and how to solve those risk related problems. Certain strategies can be deployed to overcome the problems faced by the farm.

You may also like to read:


  • Aerts, J. C., and, 2014. Evaluating flood resilience strategies for coastal megacities. Science. 344(6183). pp.473-475.
  • Allan, R. J., Nicholls, N., Jones, P. D. and Butterworth, I. J., 1991. A further extension of the Tahiti-Darwin SOI, early ENSO events and Darwin pressure. Journal of Climate, 4(7), pp.743-749.
  • Armstrong, D. P., Knee, J. E., Doyle, P. T., Pritchard, K. E. and Gyles, O. A., 2000. Water-use efficiency on irrigated dairy farms in northern Victoria and southern New South Wales. Animal Production Science, 40(5), pp.643-653.
  • Bowman, D. M., and, 2013. Forest fire management, climate change, and the risk of catastrophic carbon losses.
  • Eakin, H. C., Lemos, M. C. and Nelson, D. R., 2014. Differentiating capacities as a means to sustainable climate change adaptation. Global Environmental Change. 27. pp.1-8.
  • Earle, D. F. and McGowan, A. A., 1979. Evaluation and calibration of an automated rising plate meter for estimating dry matter yield of pasture. Animal Production Science, 19(98), pp.337-343.
  • Francesch-Huidobro, and, 2016. Governance challenges of flood-prone delta cities: integrating flood risk management and climate change in spatial planning. Progress in Planning.
  • Jabareen, Y., 2013. Planning the resilient city: Concepts and strategies for coping with climate change and environmental risk. Cities. 31. pp.220-229.
  • Koks, E.E., and, 2015. Combining hazard, exposure and social vulnerability to provide lessons for flood risk management. Environmental Science & Policy. 47. pp.42-52.
  • Kunreuther, H., and, 2013. Risk management and climate change. Nature Climate Change. 3(5). pp.447-450.
  • Lee, J. M., Clark, A. J. and Roche, J. R., 2013. Climatechange effects and adaptation options for temperate pasturebased dairy farming systems: a review. Grass and Forage Science, 68(4), pp.485-503.
  • Moran, J., 2005. Tropical dairy farming: feeding management for small holder dairy farmers in the humid tropics. Csiro Publishing.
  • Woodward, M., Kapelan, Z. and Gouldby, B., 2014. Adaptive flood risk management under climate change uncertainty using real options and optimization. Risk Analysis. 34(1). pp.75-92.
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