Various source of risk inherent in agricultural and agribusiness firms. Classical risk theories and their current applications in agricultural production and farm management issues will be introduced. Concepts of risk and uncertainty, trade-off between risk and income, subjective and objective measures of risk, decision matrix and decision tree, simple decision rules, expected utility theory, mean-variance analysis, firm's decision under uncertainty, and production decision under risk. Risk reducing strategies such diversification, future markets, hedging and insurance will be introduced with practical problems of the real world.