In

previous sessions, we learned about how to iden4fy and assess risks and quan4fy
their impacts. We learned various approaches on assessing the capacity of
stakeholders to manage dierent risks. In this session, well learn approaches to
priori4zing risks. Again, why do we priori4ze? So that we can op4mize available
resources to beDer manage those risks that are having the biggest adverse impacts
on incomes and livelihoods, and sector growth.

At this point we need to understand which risks are more likely to cause the most
adverse shocks to specic stakeholder groups, target sub-sectors and the sector as a
whole.
The primary criteria used to priori4ze risk are: (1) probability of event (or frequency
of occurrence), and (2) severity of impact. However, lack of clarity about the meaning
of dierent terms might introduce undesired bias.
Strategic Priori,es- Certain stakeholders, objec4ves or regions may be priori4zed
based on sub-sector context or client preferences.
Regional varia,ons - There may be a need to account for dierent regional or crop
risk proles given the varia4ons in climate, agro-ecological and socio-economic
condi4ons.
Recovery period - The amount of 4me it takes stakeholders to recover could be used
for priori4za4on. For example:
Short term. Single produc4on season/year.
Medium term. Impact lasts a three to ve seasons / years.
Long term. Event permanently cripples an industry.

Classica4on is based on the occurrence of historical events that have records and
their impact is known. But in some cases, historical records might not be available.
In such cases, interviews with the stakeholders and key informants and their
individual (subjec4ve) experiences about the frequency of occurrences can help
classify the risk in an appropriate category.

Historical occurrence of events is the best way to determine the probability of events
occurring in the future. Frequency of occurrence of risk events can be es4mated from
news, databases and stakeholder input. To reduce subjec4ve bias, dene clear,
measurable terms such as those in this table.

The magnitude of losses from each risk reects the severity of impacts. This in turn is
a func4on of two dierent factors: 1) frequency of the risk event and 2) likelihood (or
probability) of loss from a risk event. This o\en can be calculated by mul4plying the
nancial loss sustained by an actor by the frequency/spread of the event). Since the
objec4ve of the assessment is to provide a na4onal snapshot, losses should be
assessed at na4onal level, using disaggregated regional and district level data, where
available.

How to summarize (illustrate) priori4za4on factors

10

There are dierent approaches to visualizing scope and frequency of vola4lity and
risk events. The rst step is mapping via a visual 4meline of loss events. This will
provide insights into what are the principal causes of observed vola4lity and resul4ng
losses. Time-series FAOSTA Produc4on indices (e.g., crops, good, livestock) can be
useful or Agricultural GDP growth.

11

As we saw earlier, iden4fying the specic sources of risks that may have contributed
to observed shocks based on best available primary and secondary sources allows us
to ascribe aDribu4on

12

Another tool leverages the results of the crop loss analysis to compare scope and
frequency of losses across commodi4es to see which are most impacted, in terms of
frequency and cumula4ve nancial losses This aids in highligh4ng which commodi4es
are most suscep4ble to risk-induced losses and therefore might benet from closer
scru4ny during the solu4ons assessment.

In the risk assessment of Paraiba, Brazil, sugar cane and fruit, especially grapefruit,
due to their large share in the total agricultural output value of Paraiba, are most
suscep4ble to losses, and so, might be given priority in the risk management strategy.

13

Another way is assessing losses by risk event type.

This bubble graph provides another way to illustrate severity of impact by illustra4ng
es4mated losses vs. frequency of event, and thus, the priori4za4on of risks.

Financial losses at level of produc4on are calculated by es4ma4ng the number of
hectares of lost produc4on mul4plied by the value of that produc4on (per hectare).

Frequency of event is calculated by the number of 4mes the event has occurred
divided by the total number of risk events.

In both cases, assump4ons are derived in part from stakeholder input and the data
gathering process.

14

15

Par4culalry when quan4ta4ve data is scarce, focus groups interviews can be useful to
inform the development and comparison of how stakeholders perceive risks from
one region to the next. These bar charts illustrate the risk priori4es for rice producers
in dierent regions of Guyana. Flooding was the highest ranked priority in Region 5
whereas red rice was the highest ranked priority in Regions 3 and 6.

16

To help inform the risk priori4za4on process, it is helpful for the Team to collec4vely
iden4fy the leading risks for each target commodity to iden4fy similari4es and
divergences. This list can then be more easily aggregated at sector level.

17

Ranking risks by region is yet another lens that aids the risk priori4za4on process.

18

This chart illustrates how observed risks can also be weighted by percep4ons of
stakeholder vulnerability: 1) expected losses when a given risk event manifests and
perceived levels of exis4ng stakeholder capacity to manage that risk. Risks in the top
le\ quadrant are given the highest priority.

19

This table illustrates the priori4za4on of risk to the cocoa supply chain in Ghana
based on to two indicators: (1) probability of event, and (2) severity of impact.

For the Y-axis, each risk is ranked from remote to highly probable

20

This table illustrates the priori4za4on of risk to the cocoa supply chain in Ghana
according to two indicators: (1) probability of event, and (2) severity of impact.

21

22

23

24

25