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Risk Management Workshops in MD 2001-03. Wesley N. Musser and Michael Haigh Farm Management Extension Specialist and Marketing Extension Specialist, Respectively Department of Agr. & Res. Econ. University of Maryland. Crop Insurance Participation Low in MD.

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Risk management workshops in md 2001 03

Risk Management Workshops in MD2001-03

Wesley N. Musser and Michael Haigh

Farm Management Extension Specialist and

Marketing Extension Specialist, Respectively

Department of Agr. & Res. Econ.

University of Maryland

Crop insurance participation low in md
Crop Insurance Participation Low in MD

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

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

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

Agricultural risk protection act of 2000
Agricultural Risk Protection Act of 2000

  • Increased premium subsidies

  • Authorized higher coverage levels

  • Risk Management Education program strengthened

  • Special Education Program for Underserved States in NE and West

    • Initial cooperative agreements for educational programs for 2002 in Fall, 2001

    • MD Program joint with MD Dept. of Agr.

Possible reasons for low participation
Possible Reasons for Low Participation

  • Farmers lack basic understanding of crop insurance

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

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

  • Farmers not aware of changes in 2002 Act

  • Lenders, extension personnel, inputs suppliers, and others uninformed about crop insurance

  • Insufficient time to delineate importance of above reasons

Farm structure in md
Farm Structure in MD

  • Small diverse state with 12,000 farms

  • About 1,260 farms with sales above $100,000

  • Eastern Shore, Between the Atlantic and Chesapeake Bay, a “little corn belt” with broilers

  • Central MD in Baltimore-DC corridor

  • Dairy farms in Central and Western MD

  • Mostly forested in the West

  • 23 Counties

Structure of educational program
Structure of Educational Program

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

  • Grants to counties to assist with planning and implementation of workshops

  • MDA provided publicity about crop insurance and the educational program

Two educational activities
Two Educational Activities

  • Regularly scheduled state, regional, and county farmer meetings

  • Crop insurance workshops

    • Regional businesses and government meetings

    • Regional and county farmer meetings

Scheduled meetings
Scheduled Meetings

  • Short talks by Musser or Extension Associate

  • Distributed RMA Fact Sheets and other handouts on crop insurance

  • Purpose: Increase awareness of current crop insurance products

  • Attended 10 meetings with 50-125 participants


  • Two for Agribusiness and Government in Dec. 2001

  • Nine for Farmers in Jan-Feb, 2002

    • Six regional meetings in Eastern Shore, Central, and Southern MD

    • Three county meetings in Western MD

Planning workshops
Planning Workshops

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

  • Dates that did not conflict with other activities

  • Nine to twelve thirty for workshops

  • Sites that are convenient for farmers, where they like to attend meetings, and have a noon meal that they like

  • Grants to host counties for local meeting expenses

Promotion of workshops
Promotion of Workshops

  • Local county newsletters, papers, and oral announcements

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

  • MDA distributed a press release

  • National Crop Insurance Services mailed an announcement to crop insurance agents

  • Announced in appearances at regularly scheduled meetings

Workshop curriculum
Workshop Curriculum

  • Used existing publications and research

  • Distributed notebook

    • Slides for presentations

    • List of crop insurance agents

    • RMA Fact Sheets

    • Other crop insurance and risk management educational material

Presentations related to perceived reasons for low participation
Presentations Related to Perceived Reasons for Low Participation

  • Returns to crop insurance over time

  • Basics of crop insurance in MD

  • Adjusted gross revenue insurance

  • Marketing and crop insurance

  • Farmer panel on crop insurance experiences

  • Crop insurance agents to answer questions

Presenters Participation

  • Musser

  • Haigh

  • RMA personnel

  • Local farmers selected by county agents

Would farmers come
Would Farmers Come? Participation

  • Low recent attendance at Ag. Econ workshops

    • Ten or Fewer Participants

    • Many Cancelled

  • We Tried

They came
They Came! Participation

  • Agribusiness and Government Workshops had 22 and 26

  • Regional Farmer Workshops ranged from 22 to 65 participants

  • County Workshops had 9 to 28 attending

They bought more insurance in 2002
They Bought More Insurance in 2002! Participation

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

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

  • Level of coverage also increased

    • Corn Liability Protection Increased 32%

    • Liability for all crops increased nearly twice that of corn

Severe drought in 2002
Severe Drought in 2002 Participation

They collected record indemnities
They collected record indemnities Participation

  • $22.6 million in 97-01

  • $22.6 million for 2002 as of 3/24/03

  • Farmer Loss Ratio of 7.45

  • 19 AGR, 9 GRP, and other policies still to report

  • $14.9 million for corn ($11.8 million CRC)

  • $7.2 million for soybeans

  • 60,000 A of corn and 108,000 A of beans in CAT

Did our program matter
Did Our Program Matter? Participation

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 2002
Other Activities in 2002 Participation

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

  • Farm Bill Workshops in Aug

Farm bill workshops
Farm Bill Workshops Participation

  • Policy Background

  • Crop Income Programs

  • Base Selection

  • Dairy Program

  • Conservation Programs

  • Other Provisions

Speakers Participation

  • Five AREC Extension Specialists

  • FSA Rep

  • NRCS Rep

Workshop organization
Workshop Organization Participation

  • Extension Associate/County Offices

  • Similar sites

  • Longer program—adjourned about 3pm

  • Same publicity methods

  • They Came Again: 22 to 110 participants

2003 farmer workshops
2003 Farmer Workshops Participation

  • Similar organization methods and timing

  • None cancelled due to snow

  • Focused on case studies of insurance payments and marketing

  • Slightly smaller attendance

Model worked three times
Model Worked Three Times Participation

  • Extension Associate and County Agents organize sites and dates

  • Free Morning Coffee and Noon Meal

  • Grants to County Offices for publicity and meeting expenses

  • Publicity from MD Dept of Agriculture

  • Presentations from Extension Specialists, Federal Agencies, and Industry

  • What Else?

What do y all think

What Do Y’all Think? Participation