RISK MANAGEMENT PLAN

RISK MANAGEMENT PLAN Evidence of and understanding of an integrated risk management plan and a description of counter parties on whom the operation is dependent will also need to be provided. Finally, farmers will increasingly be required to provide evidence of compliance with sustainability and environmental requirements. Given all these factors, we may be looking at several years of tighter credit. If a lending institution fails or gets in trouble and is acquired by another lender, farmers who finance with the former lender are almost always subject to higher credit standards — not because the new lender is tougher, but because the former lender was too lax. In a case where a farmer’s loans were too large to be handled by the originating lender, a pull-out by one of the participating lender(s) can be even more devastating, because there will be fewer, if any, lenders willing to take their place, and it could become a house of cards if the lender can’t find a replacement participating lender.