Which of the following is a common strategy for risk management in agriculture?

Diversification of crops is a common strategy for risk management in agriculture because it helps spread risk across different products. By growing a variety of crops, farmers can reduce the potential impact of factors such as weather events, pest infestations, or market fluctuations that could adversely affect a single crop. If one crop underperforms, the others may still yield profits, providing a buffer against total financial loss.

Furthermore, diversifying can help in taking advantage of different market demands and price changes, leading to a more stable income overall. This strategic approach not only mitigates risk but also encourages sustainable agricultural practices by improving soil health and increasing biodiversity on the farm.

The other strategies, such as single crop dependency or ignoring market trends, can lead to increased vulnerability to losses, making it more challenging for farmers to manage their operations effectively in the face of uncertainties. Resting soils without crops may contribute to soil health but does not provide a direct strategy for addressing market and production risks.