Agricultural risk refers to the potential for losses in farming due to various uncertainties. These risks can arise from factors such as weather conditions, pests, diseases, and market fluctuations. For instance, a drought can severely impact crop yields, while a sudden drop in prices can affect farmers' income. Farmers often manage agricultural risk through strategies like crop diversification, insurance, and adopting new technologies. By spreading their investments across different crops or livestock, they can reduce the impact of a single failure. Additionally, tools like crop insurance help protect against financial losses from unforeseen events.