Over the past dozen years, policymakers have largely abandoned long-standing popular approaches for addressing risk in agriculture without fully resolving the question of how best to manage the negative consequences of volatile agricultural markets. The article reviews the transition from past policies and describes current approaches that distinguish between the trade-related fiscal consequences of commodity market volatility and the consequences of price and production risks for vulnerable rural households and communities. Current policies rely more heavily on markets, even though markets for risk are incomplete in numerous ways. The benefits and limitations of market-based instruments are examined in the context of risk management strategies, and innovative approaches to extend the reach of risk markets are discussed.For decades governments have intervened to reduce risk in markets for internationally traded commodities. Over the past dozen years, however, many of the policies and supporting institutions used for that purpose were reevaluated and found to be not only ineffective and unsustainable but impediments to growth. Most of these approaches have now been abandoned, but governments and policymakers still seek to understand how best to manage the negative consequences of volatile commodity markets because traded commodities remain an important source of export earnings for many developing economies and an important component of income and consumption for the poor.This article reviews the historical relationship between the work of applied economists and policymakers and the commodity and risk market instruments introduced in the 1980s. It explores how a growing body of analytical work contributed to a change in thinking that moved the emphasis of policy from stabilization to management of risks, and it surveys current thinking on managing rural risks.