DEFRA HAS awarded the Home Grown Cereals Authority (HGCA) a £500,000 grant for a three year project to improve price risk management within the arable sector, it has been announced.
The money will fund over 100 grower training events across the country, which will initially focus on basic principles such as understanding production costs, selling forward and the various deals available from merchants, co-ops and other buyers, explained HGCA senior economist, Julian Bell.
“We want to get people to concentrate on basic business sense at first. Knowing your production costs is the number one thing to consider – this ties in with our existing CropBench project, which enables growers to benchmark their production costs.
“Once you know what you’re trying to protect, you can then move on to look at the deals traders are offering and other more advanced risk management methods such as futures options and currency options,” he said.
Interactive tools will also be developed to support the events and spread the messages to a wider audience, he added.
“A better understanding of price risk management can help remove the emotion from selling grain and allow more balanced decision making. It takes away some of the risk of price fluctuations.”
The programme of events is expected to begin in the New Year and more information will appear on www.hgca.com when the details have been finalised.