Agriculture is among the most risk-pronesectors in the economies of Central Asia. Production shocksfrom weather, pests and diseases and adverse movements inagricultural product and input prices not only impactfarmers and agri-business firms, but can also straingovernment finances. Some of these risks are small andlocalized and can be managed by producers. Others are theresult of more severe, exogenous shocks outside agricultureor outside the country, which require a broader response.Failure to respond adequately to these more severe risksleads to a perpetual cycle of ‘shock-recovery-shock’, whichreinforces poverty traps and compromises long-term growth.The agriculture sector’s exposure to production and pricerisk is increasing. Climate change is increasing productionrisks in the short to medium-term by increasing thefrequency and severity of droughts and floods and in thelonger-term by reducing the availability of water forirrigation due to accelerated glacial melt. Themodernization and commercialization of agriculturalproduction and processing, which is critical for sectorgrowth, also raises the sector’s exposure to price risk at atime of high volatility on international markets foragricultural commodities. An effective response to theserisks requires a broader, more integrated approach to riskmanagement than the current system of ex-ante, public sectoractivity associated with crop and livestock disease and adhoc, ex-post emergency responses to local disasters.Measures to strengthen risk mitigation need to bemainstreamed into sector development and investmentprograms, additional human and financial resources need tobe allocated to the public institutions responsible forex-ante and ex-post risk management, and the potential fortransfer (insurance) mechanisms will need to be clarifiedand developed where feasible. Given the limited human andfinancial resources available for public sector activity, aclear sense of the priorities for agriculture riskmanagement is also required, together with a balanced viewof the respective roles of public and private sector stakeholders.