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Risk Management Workshops in MD 2001-03

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

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  1. 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

  2. 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

  3. 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.

  4. 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

  5. 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

  6. 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

  7. Two Educational Activities • Regularly scheduled state, regional, and county farmer meetings • Crop insurance workshops • Regional businesses and government meetings • Regional and county farmer meetings

  8. 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

  9. Workshops • 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

  10. 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

  11. 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

  12. 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

  13. 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

  14. Presenters • Musser • Haigh • RMA personnel • Local farmers selected by county agents

  15. Would Farmers Come? • Low recent attendance at Ag. Econ workshops • Ten or Fewer Participants • Many Cancelled • We Tried

  16. They Came! • Agribusiness and Government Workshops had 22 and 26 • Regional Farmer Workshops ranged from 22 to 65 participants • County Workshops had 9 to 28 attending

  17. They Bought More Insurance in 2002! • 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

  18. Severe Drought in 2002

  19. They collected record indemnities • $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

  20. 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

  21. Other Activities in 2002 • 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

  22. Farm Bill Workshops • Policy Background • Crop Income Programs • Base Selection • Dairy Program • Conservation Programs • Other Provisions

  23. Speakers • Five AREC Extension Specialists • FSA Rep • NRCS Rep

  24. Workshop Organization • Extension Associate/County Offices • Similar sites • Longer program—adjourned about 3pm • Same publicity methods • They Came Again: 22 to 110 participants

  25. 2003 Farmer Workshops • Similar organization methods and timing • None cancelled due to snow • Focused on case studies of insurance payments and marketing • Slightly smaller attendance

  26. Model Worked Three Times • 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?

  27. What Do Y’all Think?

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