Q. What is agricultural risk management?
") document.write("Risk has always been a part of agriculture. Agricultural risk management involves identifying and planning for the various types of risks that can occur on farms and in farm businesses. Risk management recognizes the interdependency among nature, family, business and community and seeks strategies to avoid, reduce, anticipate or transfer risk.
Risk management centers on five areas.
The following links provide more information about agricultural risk management:
Risk and Risk Management. [pdf] - This fact sheet defines risk management in terms of knowing the odds and assessing how much you can afford to lose.
Comprehensive risk management site with links to publications on all risk management topics. Click on Ag Risk Library.
Risk and Resilience in Agriculture. Provides description of the five areas of risk farmers face and examples of how to position a farm to minimize them.
Q. How can I assess risk on my farm/in my farm business?
") document.write("Each producer addresses risk in his or her own way, so it’s important to understand your “risk tolerance”. Some people are more “risk averse” and some are more inclined to be risk-takers.
Here are some links to tools to help you assess your agricultural risk and your risk tolerance:
How Risk Tolerant Are You? - Excellent introduction and checklist.
Risk Assessment for the Small Farm [pdf] - Overview and self-assessment checklist.
An excellent assessment tool with Frequently Asked Questions and many links. - Targeted to beginning farmers, but useful to all.
Interactive internet based risk management “test”. - Prepared by First Pioneer Farm Credit. How well did this answer your question?
Q. How can I develop a risk management plan for my farm?
") document.write("A comprehensive risk management plan reviews, lists and provides protection tools for all five areas of agricultural risk, recognizing that the one(s) you ignore always come back to haunt you. Having assessed your own personal risk tolerance, you must also evaluate the risk aversion of key partners, including lenders, regulators, employees, investors and family. If their aversion to risk is different from yours, they may impose requirements on you to allow you to do business (insurance on equipment you borrowed to buy, workers compensation, building permits, health insurance, equity protection, etc.).
Here are some links to resources about risk management planning. See also the other Risk Management FAQs to learn more about the five risk types to help you assemble an adequate plan.
Farm business planning program offered by MDAR for existing agricultural enterprises.
Farm business planning and resources for pre-startups and beginning farmers.
Q. What are production risks and how can i manage them?
") document.write("Production risks are one of five risk management areas:
The general sources of production risk are weather, pests, diseases, the interaction of technology with other farm characteristics, and the quality/timing of inputs. Crop insurance, enterprise diversification and careful evaluation of technology are among the strategies to manage production risk.
Here are a few useful links on the topic of production risks:
http://www.mass.gov/agr/pesticides/
A Massachusetts specific resources for pesticide types, registrations, licenses, testing and uses. Also links to Consumer Bulletins.
http://www.mass.gov/agr/pesticides/pestfacts/index.htm
Picture based identificatino of all types of insect pests and information about diseases and IPM.
http://www.nal.usda.gov/afsic/AFSIC_pubs/altlist.htm
A list of alternative crops and enterprises with many excellent links.
http://attra.ncat.org/attra-pub/PDF/organiccrop.pdf
Organic Crop Production Overview. A how to guide for farmers looking to diversify through incorporating organic crops in the farm.
Q. What are marketing risks and how can I manage them?
") document.write("Marketing risks are one of five risk management areas:
Managing market risk involves an understanding of your own business’ position in the local and global agricultural product mix as well as forces that influence those markets such as weather or government action. A workable marketing plan addresses your product mix, services offered and production capacity. Market plan goals and objectives should factor in your personal preferences and skills, and it should allow for a comfortable level of risk.
Marketing tools include contracts, cooperatives, direct sales, and value-added. You may be marketing services, products, or both - directly or through wholesale distribution.
Here are some useful resources on the topic of marketing risks:
http://www.ag.state.co.us/mkt/MarketFoodPlan.pdf
Developing a Marketing Plan for Your Food Product.
http://aesop.rutgers.edu/%7Efarmmgmt/marketing/tomarket.pdf
Great workbook to learn and decide about market options.
http://www.ag-risk.org/NCISPUBS/LAIPPUB/Artic20.htm
Managing for Profit: How One Family Succeeds. Get the inside story on how one family makes economic and marketing principles work for them.
http://hortmgt.aem.cornell.edu/pdf/smart_marketing/lesser%201-1.pdf
Using a Web site to keep the attention of your customers.
http://attra.ncat.org/attra-pub/PDF/entertn.pdf
Entertainment Farming and Agri-Tourism. This publication discusses agri-entertainment, a new highly consumer-focused type of agriculture.
http://ag.arizona.edu/AREC/pubs/dmkt/Bed&Breakfast.pdf
Bed and Breakfast: Hosting Travelers for Extra Income. Using a bed and breakfast to supplement your farm income.
http://ianrpubs.unl.edu/farmmg
List of very good publications on leases and marketing.
http://ohioline.osu.edu/ae-fact/pdf/0008.pdf
Direct Marketing as a value-added opportunity for agriculture.
http://www.extension.iastate.edu/Publications/PM1853B.pdf
Local Food Connections: From Farms to Restaurants.
http://hortmgt.aem.cornell.edu/pdf/smart_marketing/Uva%203-01.pdf
Smart pricing strategies. This article helps to decide what is the best price for your product.
http://www.aec.msu.edu
Nice worksheet to help develop a marketing plan. Deals mainly with crops.
http://trmep.tamu.edu/cg/factsheets/rm1-8.pdf
Adding value to agricultural products
Q. Can I insure crops that are not covered in Massachusetts?
") document.write("You may be able to insure crops that are not currently covered in Massachusetts. The following crops are covered in Massachusetts, Apples | Clams | Cranberries | Nursery | Peaches | Potatoes | Fresh Market Sweet Corn | Tobacco
For crops not covered in Massachusetts, there are three options:
1. A crop that is not insured in Massachusetts may still be insured by through the Risk Management Agency. You may apply for a Written Agreement to cover this crop. Contact your crop insurance agent to find out more about this option.
2. If the crop is not insured by RMA, you may obtain NAP (Non-insured Assistance Program) coverage through the Farm Services Agency. Contact your FSA office or visit http://disaster.fsa.usda.gov/nap.htm to learn more about NAP.
3. You may qualify for RMA\'s Adjusted Gross Revenue coverage. Contact your crop insurance agent or download an RMA Fact Sheet on AGR.
Q. What are legal risks and how can I manage them?
") document.write("Legal risks are one of five risk management areas:
Many day-to-day farm activites have legal implications. The legal issues most commonly associated with agriculture fall into five broad categories:
The following are some useful links that address these legal issues:
http://www.massfarmbureau.com/qanda/qanda.htm
MA Farm Bureau Federation Q&A about legal matters.
http://www.mass.gov/agr/righttofarm/index.htm
Guidelines for passing a municipal agricultural bylaw clarifying the rights of farmers in using their land and in carrying out normal agricultural practices.
http://www.mass.gov/agr/programs/compost/index.htm
State Agricultural Compost licensing program provides for farm-based composting with standards less than those required for commercial composters.
http://www.mass.gov/agr/landuse/APR/index.htm
APR program information on permanent farmland protection using state purchase of non- agricultural (development) rights.
http://www.farmtransfernewengland.org
Information about business structures, farm transfer and succession, and an online directory of service providers.
http://www.farmland.org
American Farmland Trust’s comprehensive site to learn about agricultural easements.
http://www.mass.gov/agr/agcom/index.htm
Formation of municipal Agricultural Commissions to educate non farmers about farming practices and to serve as a buffer between farm land owners and residential use.
Q. What are financial risks and how can i manage them?
") document.write("Financial risks are one of five risk management areas:
Financial risks have to do with the ability to meet cash flow needs, maintaining and growing equity and the cost and availability of capitcal. Managing risks in these areas depends on sound planning and financial controls. Tools to manage financial risk include a solid business plan, record keeping and insurance.
Here are some useful resources on the topic of financial risks:
http://www.firstpioneer.com/notebook/L3/farmbusplan.asp
Farm business planning checklist and more.
http://www.mass.gov/agr/programs/farmviability
Farm Viability Enhancement Program provides state money to invest in items identified in a business planning process that will increase the viability of the farm. Requires a short term agricultural restriction of 5-10 years.
https://www.mwpshq.org/610A.html
A comprehensive investigation of longer range, strategic farm business planning.
http://www.massfarmbureau.com/qanda/qanda.htm
MA Farm Bureau Federation Q&A about tax issues.
http://www.irs.gov/publications/p225/index.html
IRS guide for farmers.
Q. What are human resources risks and how can I manage them?
") document.write("Human resource risks are one of five risk management areas:
Human resource risks have to do with managing and retaining key people – hired labor, contractors, consultants, and certainly family. Risks include calamities such as injury, accidental death, chronic illness, divorce and family stress. Labor management and estate and succession planning are important risk management concerns. Many human risk management tools are mandated by regulators – but your biggest tool is frequent and effective communications with the people who work at, come onto, invest in, buy from, or have an ownership or controlling interest in your farm enterprise.
Here are some useful resources on the topic of human resource risks:
http://www.cnr.berkeley.edu/ucce50/ag-labor/7labor/001.htm
Comprehensive guide to farm labor management.
http://trmep.tamu.edu/cg/factsheets/rm8-3.pdf
Human Resource Management: Employee Attraction and Selection Guide. This fact sheet is designed to assist in finding and hiring employees.
http://www.agnr.umd.edu/MCE/Publications/PDFs/FS778.pdf
Estate Planning for Farm Families. This is good overview of estate and transfer planning, but some figures are out of date. Check with your advisors.
http://edis.ifas.ufl.edu/pdffiles/CV/CV13800.pdf
The Worker Protection Standard. This fact sheet explains the U.S Environmental Protection Agency regulations relating to an agricultural worker’s handling and exposure to pesticides.
http://ohioline.osu.edu/b862/b862_13.html
Transferring Your Farm Business to Family Relations. Human relations guidelines in farm transfers.
http://www.fcssw.com/notebook/L3/tips_estate_planning.htm
Is Estate Planning Worthwhile? Nice overview of what can happen if you do not do serious estate planning.
http://www.exnet.iastate.edu/Publications/PM1474A.pdf
If you plan to transfer your business to the next generation, consider these factors.
http://ohioline.osu.edu/cd-fact/1180.html
Employing Family Members.
Q. How can I learn about and obtain crop insurance?
") document.write("A. How can I find out more about the types of crop insurance products?
http://www.rma.usda.gov/
This site provides an excellent overview of Risk Management Agency updates and information.
http://www.extension.iastate.edu/Publications/FM1860.pdf
Actual production history and Insurance Units for Multiple Peril Crop Insurance.
http://www.canr.uconn.edu/ces/frm/documents/eb2004-3Crop_Insurance_Workbook.pdf
This article helps you address whether you need crop insurance.
http://www.fsa.usda.gov/pas/publications/facts/html/nap01.htm
This fact sheet explains a federal disaster assistance program.
B. Where can i find a crop insurance agent?
http://www3.rma.usda.gov/apps/agents/result.cfm
Links you to the USDA Risk Management Agency’s “Agent Locator” to locate crop insurance agents in Massachusetts.
C. What crops are covered by crop insurance?
Apples | Clams | Cranberries | Nursery | Peaches | Potatoes | Fresh Market Sweet Corn | Tobacco
D. What about organic crops?
Read this fact sheet
E. Can I insure crops that are not covered in Massachusetts?
You may be able to insure crops that are not currently covered in Massachusetts. The following crops are covered in Massachusetts, Apples | Clams | Cranberries | Nursery | Peaches | Potatoes | Fresh Market Sweet Corn | Tobacco
For crops not covered in Massachusetts, there are three options:
1. A crop that is not insured in Massachusetts may still be insured by through the Risk Management Agency. You may apply for a Written Agreement to cover this crop. Contact your crop insurance agent to find out more about this option.
2. If the crop is not insured by RMA, you may obtain NAP (Non-insured Assistance Program) coverage through the Farm Services Agency. Contact your FSA office or visit http://disaster.fsa.usda.gov/nap.htm to learn more about NAP.
3. You may qualify for RMA\'s Adjusted Gross Revenue coverage. Contact your crop insurance agent or download an RMA Fact Sheet on AGR.
F. Can I insure my farm income?
Read about Adjusted Gross Revenue
http://www.rma.usda.gov/pubs/rme/fsh_15.pdf
http://www.canr.uconn.edu/ces/frm/documents/AGR-Lite2006_000.pdf