RiskWi$e: Enterprise financial decisions

WHY THIS PROJECT IS NEEDED 

Decisions in farming are diverse and often complex. Decisions in any one area can have impacts on others, so making well thought out decisions is crucial in managing risk. 

Riverine Plains is supporting growers to consider their major financial decisions in terms of the probability of upside returns, offset against the associated downside risks

Grain growers face increasing levels of risk. The two main risks faced by grain growers that affect their business success are yield (impacted by weather changes) and price volatility – both are expected to become more unpredictable in the future. 

RiskWi$e is designed to support growers in managing risk. With a better knowledge of risks, grain growers are able to make decisions about on-farm management that maximise the rewards and minimise the downside risk. 

Ultimately, the RiskWi$e project aims to provide farmers with the knowledge and support needed to enhance crop yields and profitability, sustainably into the future.

Background

RiskWi$e (originally developed as the National Risk Management Initiative - NRMI) is a 5-year national initiative of around $30 million that runs from 2023 to 2028. 

RiskWi$e seeks to understand and improve the risk-reward outcomes for Australian grain growers by supporting grower on-farm decision-making. To do this it will: 

1. Involve grain growers in identifying on-farm decisions that have unknown components of risk-reward, for new insights
2. Develop an improved understanding of the risk-reward relationships for on-farm management decisions
3. Inform growers and advisors of new insights into optimising rewards and managing risk
4. Challenge grower decision-making so future management decisions are evaluated in terms of the probability of upside returns offset against the associated downside risks.

The project comprises five key themes; nitrogen decisions, sowing decisions, enterprise agronomic decisions, enterprise financial decisions and managing natural resource capital. 

Project focus

As part of the national RiskWi$e project, Riverine Plains and Holbrook Landcare will work with the NSW Action Research Group (ARG) and the National Project Lead to develop a series of guidelines that can help farmers and advisors better understand risky decisions.  

Riverine Plains will also work with NSW ARG members delivering workshops on understanding and improving decision making.

This project will also focus on tools that allow growers to explore their risky decisions and build an enhanced understanding of risk into their gut-feel decision-making.