Risk In Agricultural Decisions

The concept of risk, especially in the context of a decision, is difficult to assess for a number of reasons. First, risk is more based on perception than facts. Paul Slovic, a psychologist who has done landmark studies over the past three decades, identified key characteristics that helped define human perception of risk. He found that people did not tolerate risks that were perceived as lacking control, associated with dread, had a catastrophic potential, had fatal consequences, and would result in an inequitable distribution of risks and benefits.

The classic example of a perceived risk that is uncontrollable and potentially catastrophic is a nuclear power plant. While modern plants have numerous safeguards to prevent a meltdown, they are perceived as highly dangerous by many individuals because they lack personal control over them. Ironically, some of the same people who perceive nuclear power plants as high risk do not use seatbelts while driving a car or wear a helmet when riding a motorcycle. Even though it is well-documented that seatbelts and helmets prevent serious head injuries in an accident, these people believe they are in control of their vehicles and bikes at all times.

Second, risk can be in the form of an extremely rare event. Nassim Taleb, in his book “The Black Swan,” defines a “black swan” as an event that is unexpected, extremely impactful, and difficult to predict. Black swans are so rare that people are unprepared for their occurrence. In some sense, the risk of a black swan is incalculable as it is catastrophic.

An example of a black swan is the Big Thompson Flood which occurred in Colorado in 1976. This flood was considered a one-in-1,000-year event and therefore beyond the living memory of many generations. Its occurrence was unexpected, impactful, and unpredictable by forecasting techniques at that time.

Third, the concept of risk is shaped by our educational and cultural backgrounds. People fear what they do not understand and people reject positions and/or practices that are not politically or socially acceptable. Education exposes individuals to new ways of thinking and to facts beyond those collected through experience. New technologies and novel solutions can challenge a position or practice.

Lastly, risk can be difficult to assess due to too little or too much data or information. In most cases, an individual may understand the underlying logic for processes affecting a decision but lack the data to reasonably predict an outcome. In a few cases, an individual may be overwhelmed by too much data and suspend any logical thinking when making a decision. In these cases, a person will focus on one or two variables to assess the behavior of a complex system.

Remembering The Odds

Risk by definition is associated with loss and everyone tries to avoid it. However, in order to take advantage of new technologies, products, and/or services, we accept certain calculated risks since they are part of our lifestyle and jobs. For example, it is almost certainty that over a lifetime everyone will experience some type of non-fatal automobile accident.

The same is true for food poisoning, a burn, electric shock, or injury. This social acceptance of risk is well-illustrated by the example of electricity. Michio Kaku, a popular physicist and futurist, noted that after the invention of electricity, many people resisted the building of an electrical infrastructure due to the fear of electrocution. And they were right. The risk of electrocution was real and it still exists today. In fact, according to the American Burn Association, there are on average 400 deaths and 4,400 injuries due to electrical hazards. We, as a society, accept this risk because the benefits of an electrical infrastructure far outweigh the likelihood of an individual experiencing death from electrocution.

While one can never rule out a “black swan” occurring in agriculture, most of our concerns about risk have to do with data and information, education, and cultural practices because the decisions we make are under our control. With that attention, there are a few steps we can take to minimize risk in our production decisions.

A Five-Step Approach

First, keep good records. In agriculture, as in other environmental systems, history repeats itself. There are predictable patterns in weather, crops, and pests.

Second, expect the unexpected. While a growing season may appear to be similar to a previous one, there will always be subtle differences. A selected hybrid may be less sensitive to environmental stresses but more susceptible to a new pest.

Third, whenever possible, have more than one solution to a problem. For example, weather conditions may result in a narrow planting window and therefore additional equipment may be required to complete seeding by a desired date. Or a worker may become sick at critical time requiring the temporary hiring of additional personnel.

Fourth, understand the technology supporting a decision. Whether its software or equipment, be sure everything works and has been calibrated to your specific field setting and operation.

Lastly, seek advice and learn from others. We are living in an information age. Help is just a key stroke or call away. While you may be facing a new event, such as a herbicide-resistant weed, you can be sure someone else in another location has experienced the same event in a previous year.

Leave a Reply

Decision Support Software Stories
Ag Weather Service
Decision Support SoftwareSciFi in Ag: Will Amazon’s Alexa Control the Family Farm Someday?
January 19, 2017
*Article Notes: This monthly column takes some crazy sounding ideas and applies them to the field of Ag Tech. The Read More
Decision Support SoftwareHTS Ag, AgriSync Announce New Partnership
December 28, 2016
HTS Ag will strengthen their customer connection with their recent partnership with AgriSync, a remote support mobile app. With the Read More
Decision Support SoftwareOrion Samuelson to Keynote 2017 FarmLogs Mobile User Conference
December 14, 2016
FarmLogs today announced that the most recognized voice of agriculture, Orion Samuelson, will keynote all three stops of the 2017 Read More
Decision Support SoftwareAgDNA FMIS Platform Selected for Tulane Nitrogen Reduction Challenge
December 14, 2016
AgDNA’s farm management software is among five solutions selected for the Tulane University Nitrogen Reduction Grand Challenge. The aim is Read More
Trending Articles
PrecisionAg.com featured image
ProfessionalsWelcome to the Newly Enhanced PrecisionAg.com
December 29, 2016
Talk a quick look around our website and we hope you’ll notice it’s significantly different as we head into 2017 Read More
Ryan Raguse and Matthew Grassi
ProfessionalsIndustry Executives Talk New PrecisionAg Professional Brand
December 19, 2016
EFC Systems President and CEO Ernie Chappell Myriad Mobile Cofounder and Chairman Ryan Raguse Read More
PrecisionAg Professional logo
Industry NewsMeister Media Debuts PrecisionAg Professional
December 13, 2016
Agricultural technology is accelerating, and precision agriculture is gaining renewed interest across cropping systems. At the same time, growers are Read More
Sensors/IoTNew Farming Focused IoT Partnership Announced
December 13, 2016
Infiswift, an enterprise Internet of Things (IoT) platform developer, announces a partnership to develop IoT solutions with Acuitus Ag, an Read More
GVM E-Series cab
Ag Tech GlobalGlobalization And Precision Agriculture
December 7, 2016
Globalization has taken on a negative connotation in some circles in the U.S. in recent months. The lightning rod for Read More
Farmers Edge Truck
Data ManagementFarmers Edge, Trotter Fertilizer Form Partnership To Enhance VRT Programs
November 29, 2016
Farmers Edge, a global leader in precision agriculture and independent data management solutions, has partnered with Trotter Fertilizer, Nebraska’s foremost Read More
Latest News
Sonny Perdue
Business ManagementAg Tech CEOs Weigh In On Trump’s Pick For Ag Secr…
January 20, 2017
With President-Elect Donald Trump’s selection of Sonny Perdue as the new proposed Secretary of Agriculture, it brings a new set Read More
BASF Maglis Grower Tablet
EventsRetailers, Consultants Untangle Software Decision Proce…
January 19, 2017
Today, business and agronomy management software is the engine that facilitates a smooth running ag business. The next software decision Read More
Ag Weather Service
Decision Support SoftwareSciFi in Ag: Will Amazon’s Alexa Control the Fami…
January 19, 2017
*Article Notes: This monthly column takes some crazy sounding ideas and applies them to the field of Ag Tech. The Read More
Data ManagementNew Partnerhship Between AgIntegrated, CDMS, SeediQ Wil…
January 18, 2017
AgIntegrated, Inc. (AGI), CDMS, Inc. and SeediQ announce a partnership to develop, promote, and sell a single-source crop input reference Read More
Corn Field Sunset
Ag Tech GlobalAg Technology Among Focus Areas For Kohli Impact Invest…
January 18, 2017
Tej Kohli, a serial entrepreneur, global businessman and philanthropist, has announced he has earmarked an initial $25 million USD, through his Read More
Terry Griffin
Business ManagementUsing High Tech To Make Farm Decisions
January 17, 2017
Raj Khosla, professor of precision agriculture at Colorado State University, challenged farmers to think about how far the technology of Read More
Decisive Farming My Farm Manager mobile app
Ag Tech GlobalLeading Canadian Farming Co-op Brings In New Tech To Bo…
January 17, 2017
Co-op, one of the largest agricultural retailers in Western Canada, is partnering with farm management company Decisive Farming to provide Read More
Business ManagementCNH Names Danford Industry Relations Manager
January 17, 2017
Dan Danford has been named Industry Relations Manager, Precision Solutions and Telematics (PS&T), for CNH Industrial, parent company of agricultural Read More
Australian Harvest
Ag Tech GlobalAustralian Precision Agriculture Market, Forecast To 20…
January 13, 2017
Research and Markets has announced the addition of the “Australian Precision Agriculture Market, Forecast to 2020” report to their offering. Read More
Norris planter
Innovation SeriesCompelling Consultant Panel Kicks Off Next Month’s Prec…
January 12, 2017
Jeremy Wilson, Technology Specialist at CropIMS and renowned precision expert, leads a panel of top precision consultants to kick off Read More
Data ManagementProspera Selected for Top 100 Artificial Intelligence R…
January 11, 2017
CB Insights today selected Prospera to the prestigious Artificial Intelligence 100 list (“AI 100”), a select group of emerging private Read More
Business ManagementBREAKING: FAA Considering Less Restrictive Commercial D…
January 11, 2017
FAA is working toward allowing more freedom for drone operators, and at the same time is working with NASA on Read More
DronessenseFly, Agribotix Combine eBee SQ and FarmLens Offeri…
January 11, 2017
Agribotix has partnered with senseFly to offer a new combined solution for professional users. This technology solution combines the top Read More
Sentera software
DronesSentera Announces NDVI Livestream Capabilities for Doub…
January 10, 2017
Sentera today announced the upcoming release of LiveNDVI Video: livestreamed NDVI video via Sentera’s Double 4K sensor. This breakthrough technology Read More
Young Corn Field
Ag Tech GlobalEurocontrol To Commercialize Precision Agricultural Ini…
January 9, 2017
Eurocontrol Technics Group Inc., a Canadian public company specializing in the acquisition, development and commercialization of innovative test and measurement Read More
Corn Field
Data ManagementWaypoint Analytical, Highland Precision Ag Announce Str…
January 9, 2017
Waypoint Analytical (WP), based in Memphis, TN, and Highland Precision Ag (HPA), based in Mulberry, FL, are pleased to announce Read More
Western Canada Wheat field
EventsSixth Annual Precision Ag Summit Set for January 16-17 …
January 4, 2017
The 6th annual Precision Ag Summit will be held Jan. 16-17, at the North Dakota Farmers Union Conference Center in Read More
University of California Merced Professor Stefano Carpin
Hort TechRobots, People Working Together To Save Water, Enhance …
January 3, 2017
A nearly $1 million grant from the USDA is helping University of California researchers refine collaborative robotic technology that could Read More