This study aims to achieve a better understanding of the agricultural risk and risk management situation in Tanzania with a view to identifying key solutions to reduce current gross domestic product (GDP) growth volatility. For the purpose of this assessment, risk is defined as the probability that an uncertain event will occur that can potentially produce losses to participants along the supply chain.

Despite myriad challenges, Kenya has emerged in recent years as one of Africa’s frontier economies, with headline growth in the most recent decade propelling the country toward middle-income status. Less well understood is how risk dynamics associated with production, markets, and policy adversely impact sector performance, in terms of both influencing ex ante decision making among farmers, traders, and other sector stakeholders and causing ex post losses to crops, livestock, and incomes - destabilizing livelihoods and jeopardizing the country’s food security.

This report is comprised of two volumes: (i) volume one: risk assessment; and (ii) volume two: risk management strategy. Volume one continues with chapter one, which characterizes the recent performance of the agriculture sector, including agro-climatic and market conditions. It also identifies the productive systems used for this analysis. Chapter two describes the main risks in the agricultural sector, capturing market, production, and enabling environment risks along the value chains involved in the selected productive system typologies.

The present study is part of an effort by the World Bank and the State of Bahia to assess agriculture sector risks as a contribution to the strategic economic development and poverty reduction agenda of the state government. It is composed of two phases: an agricultural sector risk identification and prioritization (volume one) and a risk management strategy and action plan (volume two).