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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
  • Musser
  • Haigh
  • RMA personnel
  • Local farmers selected by county agents
would farmers come
Would Farmers Come?
  • Low recent attendance at Ag. Econ workshops
    • Ten or Fewer Participants
    • Many Cancelled
  • We Tried
they came
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
they bought more insurance in 2002
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
they collected record indemnities
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
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 2002
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
farm bill workshops
Farm Bill Workshops
  • Policy Background
  • Crop Income Programs
  • Base Selection
  • Dairy Program
  • Conservation Programs
  • Other Provisions
  • Five AREC Extension Specialists
  • FSA Rep
  • NRCS Rep
workshop organization
Workshop Organization
  • 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
  • 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
  • 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?