Risks

Our investment will be diversified across multiple countries and latitudes, crops and across the value chain in order to ensure a well balanced investment. Five risks have been identified as the primary areas of risk to our investments. A number of strategies and processes have been identified to manage the risk effectively.

Risk Factor	Managing Risk
Political Risk	Focus on more stable and open economies Written government level agreements on export and tax status Out-grower model implies strong community and government endorsement World Bank insurance (MIGA)
Crop Failure Risk	Focus on prime grain belt farmlands Irrigate a significant proportion Insure crop where necessary
Crop Price Reductions	Diversify by crop Storage facilities to manage timing Logistical infrastructure to ship to areas of higher prices Combine with out-grower marketing function Develop “value added” businesses.
Financial Risk	Prime grain-belt farmland and access to irrigation lowers volatility of profit stream Double crop (e.g. winter wheat) maximises use of cost base. Written agreements with Reserve Banks Minimise local currency balances Use scale to ensure supplies of key inputs Target donor capital to finance out-growers
Operational Risks	Top management teams with strong local knowledge Projects assessed on a standardised template with risk scores. Focus on areas with good infrastructure already in place : electricity, transport, markets “Steady” development, not “big bang”

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