Individual micro data is used to analyze the statistical properties of the farming environment (risk exposure) that can hinder or facilitate the management of risk at the farm level. It is found that the individual risk environment can significantly differ from sectoral or aggregate risk, and that farmers can benefit from some correlations to manage their risk (e.g. imperfect correlation between yields and negative correlation between price and yield). A microeconomic model is then used to simulate farmer response to different risk related policies.