– Risk is uncertainty that affects an individual’s welfare and is associated with adversity and economic loss.
– It involves the probability of loss of income and resources of farmers, harm to their health and welfare.
– It refers to a situation in which one is not sure of outcome but probabilities of alternative outcome can be established and variability of outcome can be quantified.
– So, the probabilities of risk are possible to guess but those of uncertainty are not possible to guess.
– Risk are insurable but uncertainty not.
Agriculture is often carried out in the open air, and entails the management of inherently variable living plants and animals. So, it is widely recognized that a high level of risk and uncertainty typifies the lives of people in peasant economy. Though the terms risk and uncertainty are sometimes used interchangeably, they are not same.