Risk and uncertainty

• Risk and uncertainties exist in agriculture due to imperfect knowledge about natural calamities, fluctuation in prices, input output and charges brought about by innovation.
• This lack of perfect knowledge about the future events at the farm influences all the farm influences all the decisions required to be made and hinders the growth of agricultural production and productivity.
• The term ‘risk’ involves natural phenomenon and is largely the outcome of destruction caused by nature risk therefore implies a phenomenal loss or failure uncertainty is largely man made and is caused by natural, technical, economic structural, institutional administrative and socio-economic obstacles in the planning of different production functions.
• Thus, the planner or the farmers lives on a situation of imperfect knowledge which is responsible for the slow rate of growth of agricultural sector.