Evergreen Valley Avocado Estates — Risk Management
Agricultural enterprises face a range of inherent and systemic risks. The company has identified key risk categories and will implement comprehensive mitigation strategies.
Section 15 · Business Plan
Risk Management
Agricultural enterprises face a range of inherent and systemic risks. The company has identified key risk categories and will implement comprehensive mitigation strategies.
Agricultural enterprises face a range of inherent and systemic risks. The company has identified key risk categories and will implement comprehensive mitigation strategies.
15.1 Risk Register
| Risk Category | Description | Likelihood | Impact | Mitigation Strategy |
|---|---|---|---|---|
| Climate / Weather | Drought, frost, hail damage | Medium | High | Irrigation infrastructure; microclimate monitoring; hail nets on high-value blocks |
| Crop Disease | Phytophthora root rot, anthracnose | Medium | High | Integrated pest management; disease-resistant rootstock; regular scouting |
| Market Price | Global price volatility | Medium | Medium | Diversified markets; long-term supply contracts; cost discipline |
| Currency Risk | ZAR/EUR and ZAR/USD volatility | High | Medium | Natural hedge (ZAR costs, forex revenues); forward contracts considered |
| Water Availability | Drought; water restrictions | Medium | High | On-farm dam storage; borehole capacity; efficient micro-irrigation |
| Labour | Skills shortage; wage inflation | Low | Medium | Competitive wages; training programmes; mechanisation where feasible |
| Regulatory | Changes to export regulations | Low | Medium | Industry body membership; compliance monitoring; legal counsel |
| Logistics | Port delays; transport disruptions | Medium | Medium | Multiple packhouse relationships; flexible harvest scheduling |
15.2 Insurance Programme
The company will maintain comprehensive agricultural insurance covering crop loss (hail, fire, frost), business interruption, farm buildings and infrastructure, motor vehicles and equipment, employer’s liability, and public liability. Annual insurance premiums are estimated at R800,000–R1,200,000, representing approximately 1.5–2% of asset values.
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