Managing risk is an important part of farming and its management is a concern for those governments which include this as one of their agricultural policy objectives. This report presents a framework for the analysis of risk management in agriculture that can be used for the analysis and efficient design of policies in this area. The principal concept is a holistic approach as opposed to a linear approach. A linear analysis dealing with only a specific source of risk, a specific farmer’s strategy, or a specific policy measure is likely to lead to inefficient policy choices. Risk management should be analysed as a system in which there is interaction between many elements. These elements have been organised around three axes: the sources of risk, farmers’ strategies and government policies. A number of issues and concepts are crucial to the understanding of these interactions and must be discussed from all three axes.