Risk Management Risk Management Workshops in MDWorkshops in MD

2001-032001-03Wesley N. Musser and Michael HaighWesley N. Musser and Michael Haigh

Farm Management Extension Specialist andFarm Management Extension Specialist andMarketing Extension Specialist, RespectivelyMarketing Extension Specialist, Respectively

Department of Agr. & Res. Econ.Department of Agr. & Res. Econ.University of MarylandUniversity of Maryland

Crop Insurance Participation Low Crop Insurance Participation Low in MDin MD

53% of corn acres and 58% of 53% of corn acres and 58% of soybean acres insured in 1999 soybean acres insured in 1999 despite severe drought in 97despite severe drought in 97

Indemnities of $5.8 million of corn, Indemnities of $5.8 million of corn, $1.5 million for soybeans, and $8.1 $1.5 million for soybeans, and $8.1 million for all crops in 99 due to million for all crops in 99 due to another droughtanother drought

Farmer Loss ratios 3.2 for corn, 1.6 of Farmer Loss ratios 3.2 for corn, 1.6 of soybeans, and 2.7 for all cropssoybeans, and 2.7 for all crops

Agricultural Risk Protection Act of Agricultural Risk Protection Act of 20002000

Increased premium subsidiesIncreased premium subsidies Authorized higher coverage levelsAuthorized higher coverage levels Risk Management Education program Risk Management Education program

strengthenedstrengthened Special Education Program for Special Education Program for

Underserved States in NE and WestUnderserved States in NE and West Initial cooperative agreements for Initial cooperative agreements for

educational programs for 2002 in Fall, educational programs for 2002 in Fall, 20012001

MD Program joint with MD Dept. of Agr.MD Program joint with MD Dept. of Agr.

Possible Reasons for Low Possible Reasons for Low ParticipationParticipation

Farmers lack basic understanding of crop Farmers lack basic understanding of crop insuranceinsurance

Farmers not aware of how crop insurance Farmers not aware of how crop insurance fits with marketing plansfits with marketing plans

Farmers unaware of potential returns from Farmers unaware of potential returns from subsidized crop insurance subsidized crop insurance over timeover time

Farmers not aware of changes in 2002 ActFarmers not aware of changes in 2002 Act Lenders, extension personnel, inputs Lenders, extension personnel, inputs

suppliers, and others uninformed about suppliers, and others uninformed about crop insurancecrop insurance

Insufficient time to delineate importance Insufficient time to delineate importance of above reasonsof above reasons

Farm Structure in MDFarm Structure in MD

Small diverse state with 12,000 farmsSmall diverse state with 12,000 farms About 1,260 farms with sales above About 1,260 farms with sales above

$100,000$100,000 Eastern Shore, Between the Atlantic and Eastern Shore, Between the Atlantic and

Chesapeake Bay, a “little corn belt” with Chesapeake Bay, a “little corn belt” with broilersbroilers

Central MD in Baltimore-DC corridorCentral MD in Baltimore-DC corridor Dairy farms in Central and Western MDDairy farms in Central and Western MD Mostly forested in the WestMostly forested in the West 23 Counties23 Counties

Structure of Educational ProgramStructure of Educational Program

Retired former county agent and Retired former county agent and regional farm management specialist regional farm management specialist hired as extension associatehired as extension associate

Grants to counties to assist with Grants to counties to assist with planning and implementation of planning and implementation of workshopsworkshops

MDA provided publicity about crop MDA provided publicity about crop insurance and the educational insurance and the educational programprogram

Two Educational ActivitiesTwo Educational Activities

Regularly scheduled state, regional, and Regularly scheduled state, regional, and county farmer meetingscounty farmer meetings

Crop insurance workshopsCrop insurance workshops Regional businesses and government meetingsRegional businesses and government meetings Regional and county farmer meetingsRegional and county farmer meetings

Scheduled MeetingsScheduled Meetings

Short talks by Musser or Extension Short talks by Musser or Extension AssociateAssociate

Distributed RMA Fact Sheets and other Distributed RMA Fact Sheets and other handouts on crop insurance handouts on crop insurance

Purpose: Increase awareness of current Purpose: Increase awareness of current crop insurance productscrop insurance products

Attended 10 meetings with 50-125 Attended 10 meetings with 50-125 participantsparticipants

WorkshopsWorkshops

Two for Agribusiness and Two for Agribusiness and Government in Dec. 2001Government in Dec. 2001

Nine for Farmers in Jan-Feb, 2002Nine for Farmers in Jan-Feb, 2002 Six regional meetings in Eastern Shore, Six regional meetings in Eastern Shore,

Central, and Southern MDCentral, and Southern MD Three county meetings in Western MDThree county meetings in Western MD

Planning WorkshopsPlanning Workshops

Sites and Dates chosen by County Agents Sites and Dates chosen by County Agents and coordinated by Extension Associateand coordinated by Extension Associate

Dates that did not conflict with other Dates that did not conflict with other activitiesactivities

Nine to twelve thirty for workshopsNine to twelve thirty for workshops Sites that are convenient for farmers, Sites that are convenient for farmers,

where they like to attend meetings, and where they like to attend meetings, and have a noon meal that they likehave a noon meal that they like

Grants to host counties for local meeting Grants to host counties for local meeting expensesexpenses

Promotion of WorkshopsPromotion of Workshops

Local county newsletters, papers, and oral Local county newsletters, papers, and oral announcementsannouncements

MDA mailed an announcement to all MDA mailed an announcement to all farmers on their mailing listfarmers on their mailing list

MDA distributed a press release MDA distributed a press release National Crop Insurance Services mailed National Crop Insurance Services mailed

an announcement to crop insurance an announcement to crop insurance agentsagents

Announced in appearances at regularly Announced in appearances at regularly scheduled meetingsscheduled meetings

Workshop CurriculumWorkshop Curriculum

Used existing publications and Used existing publications and researchresearch

Distributed notebookDistributed notebook Slides for presentationsSlides for presentations List of crop insurance agentsList of crop insurance agents RMA Fact SheetsRMA Fact Sheets Other crop insurance and risk Other crop insurance and risk

management educational material management educational material

Presentations Related to Perceived Presentations Related to Perceived Reasons for Low ParticipationReasons for Low Participation

Returns to crop insurance over timeReturns to crop insurance over time Basics of crop insurance in MDBasics of crop insurance in MD Adjusted gross revenue insuranceAdjusted gross revenue insurance Marketing and crop insuranceMarketing and crop insurance Farmer panel on crop insurance Farmer panel on crop insurance

experiencesexperiences Crop insurance agents to answer Crop insurance agents to answer

questionsquestions

PresentersPresenters

MusserMusser

HaighHaigh

RMA personnelRMA personnel

Local farmers selected by county Local farmers selected by county agentsagents

Would Farmers Come?Would Farmers Come?

Low recent attendance at Ag. Econ Low recent attendance at Ag. Econ workshopsworkshops Ten or Fewer ParticipantsTen or Fewer Participants Many CancelledMany Cancelled

We TriedWe Tried

They Came!They Came!

Agribusiness and Government Agribusiness and Government Workshops had 22 and 26Workshops had 22 and 26

Regional Farmer Workshops ranged Regional Farmer Workshops ranged from 22 to 65 participantsfrom 22 to 65 participants

County Workshops had 9 to 28 County Workshops had 9 to 28 attendingattending

They Bought More Insurance in They Bought More Insurance in 2002!2002!

Percent insured corn acres increased Percent insured corn acres increased to 63.1% from 54% in 2001to 63.1% from 54% in 2001

Percent of insured acres for all crops Percent of insured acres for all crops increased to 51% in 2002 (47% in increased to 51% in 2002 (47% in 2001)2001)

Level of coverage also increasedLevel of coverage also increased Corn Liability Protection Increased 32%Corn Liability Protection Increased 32% Liability for all crops increased nearly Liability for all crops increased nearly

twice that of corntwice that of corn

Severe Drought in 2002Severe Drought in 2002

YearYear Corn YieldCorn Yield Soybean YieldSoybean Yield

20002000 155155 4343

20012001 136136 3939

20022002 7676 2121

They collected record indemnitiesThey collected record indemnities

$22.6 million in 97-01$22.6 million in 97-01

$22.6 million for 2002 as of 3/24/03$22.6 million for 2002 as of 3/24/03 Farmer Loss Ratio of 7.45Farmer Loss Ratio of 7.45 19 AGR, 9 GRP, and other policies still to 19 AGR, 9 GRP, and other policies still to

reportreport $14.9 million for corn ($11.8 million CRC)$14.9 million for corn ($11.8 million CRC) $7.2 million for soybeans$7.2 million for soybeans 60,000 A of corn and 108,000 A of beans in 60,000 A of corn and 108,000 A of beans in

CATCAT

Did Our Program Matter?Did Our Program Matter?

Anecdotal Evidence

Reported sales at workshops One agent said that she was

exhausted on 3/15 Farmers reported collecting on new

policies Busy agents did not come to 2003

Meetings

Other Activities in 2002Other Activities in 2002

Regional Crop Insurance Policy Regional Crop Insurance Policy Conference in 9/02---see Conference in 9/02---see http://http://www.arec.umd.edu/Policycenterwww.arec.umd.edu/Policycenter// Crop-Insurance-and-Farm-Policy-ConfCrop-Insurance-and-Farm-Policy-Conference/erence/arechome.htmarechome.htm

Farm Bill Workshops in AugFarm Bill Workshops in Aug

Farm Bill WorkshopsFarm Bill Workshops

Policy BackgroundPolicy Background Crop Income ProgramsCrop Income Programs Base SelectionBase Selection Dairy ProgramDairy Program Conservation ProgramsConservation Programs Other ProvisionsOther Provisions

SpeakersSpeakers

Five AREC Extension SpecialistsFive AREC Extension Specialists

FSA RepFSA Rep

NRCS RepNRCS Rep

Workshop OrganizationWorkshop Organization

Extension Associate/County OfficesExtension Associate/County Offices Similar sitesSimilar sites Longer program—adjourned about Longer program—adjourned about

3pm3pm Same publicity methodsSame publicity methods They Came Again: 22 to 110 They Came Again: 22 to 110

participantsparticipants

2003 Farmer Workshops2003 Farmer Workshops

Similar organization methods and Similar organization methods and timingtiming

None cancelled due to snowNone cancelled due to snow Focused on case studies of insurance Focused on case studies of insurance

payments and marketingpayments and marketing Slightly smaller attendanceSlightly smaller attendance

Model Worked Three TimesModel Worked Three Times

Extension Associate and County Agents Extension Associate and County Agents organize sites and datesorganize sites and dates

Free Morning Coffee and Noon Meal Free Morning Coffee and Noon Meal Grants to County Offices for publicity Grants to County Offices for publicity

and meeting expensesand meeting expenses Publicity from MD Dept of AgriculturePublicity from MD Dept of Agriculture Presentations from Extension Presentations from Extension

Specialists, Federal Agencies, and Specialists, Federal Agencies, and IndustryIndustry

What Else?What Else?

What Do Y’all Think?What Do Y’all Think?