Developing Personal Risk Management Plans for Limited Resource and Socially Disadvantaged Producers in South Carolina Strike Force Counties Laurence M. Crane National Crop Insurance Services Albert Essel Delaware State University Edoe Agbodjan South Carolina State University 1

Project Overview Funding for this project was provided to National Crop Insurance Services (NCIS) through a competitively awarded Southern Risk Management Education Center (SRMEC) grant. NCIS is a not-for-profit national trade association located in Overland Park Kansas, and is the primary service organization for the crop insurance industry. We (crop insurance industry) take seriously the responsibility we have as the delivery system for the Federal crop insurance program. Recognize the value of working with others/educators in providing objective educational information. 2

Underlying Educational Philosophy A concentrated and hands-on approach to education typically leads to long-term behavioral change, and is consistent with the philosophy that behavior changes are more likely with sustained personal support. 3

Project Overview - Objectives The goal of this project was to assist Limited Resource Farmers and Ranchers in South Carolina StrikeForce Counties respond to risk in the five special emphasis areas of production, marketing, financial, legal, and human resource management. An applied education program consisting of workshops and individualized counseling was developed and conducted via a partnership of trainers, state host coordinator (SHC) and local educators (LE). 4

Project Overview - Objectives Specific project objectives were to use a business planning approach to: (1)Review risk management principles, practices, and tools to familiarize producers with how they can be effectively applied in a holistic approach to their farm situation, (2)Assist producers in conducting an effective risk assessment of their own farm business, (3)Inform producers of alternative risk management strategies, (4)Assist producers with formation and adoption of their own individualized risk response strategy, and, (5) Review the financial implications and legal considerations of their chosen strategy. These objectives were met through instruction, discussion, interactive group activities, and personal homework assignments. 5

Project Process - Structure Planning Formed project Steering Committee Project Director—Laurence Crane Project Co-Director—Albert Essel South Carolina State Host Coordinator—Edoe Agbodjan Held face-to-face project Planning Meeting with follow-up conference calls Worked out project logistics Workshop locations, dates, promotion, etc. Identified personnel (Local Extension Educators) Needs assessment discussion—established priorities Determined workshop content, structure, and outcomes Established deadlines, responsibilities, expectations 6

Workshop Overview - Structure Workshops There were three structured workshops One month apart (approximately) Six hours each (9:00-4:00) Consisted of instruction, case demonstration, group discussion, interaction, and networking Same farmers came to all three workshops Individualized Study Homework assignments following each workshop Take approximately 20 hours to complete (60 total) Assisted/supported by Local Educators (LE) Selected area(s) where you wish to focus 7

Workshop Overview - Outcomes 1. Be introduced to the farm business planning process and learn how to: Identify and list all of their farms assets and their productive capacity Determine the current wellbeing of the farm business Review the feasibility of alternative enterprises 8

Workshop Overview - Outcomes 2. Be introduced to five areas of risk and learn how to identify, measure, and mange risks on their farms in these areas: Production risks Marketing risks Financial risks Human resource risks Legal risks 9

Workshop Overview - Outcomes 3.Understand financial management of the farm and how to use financial statements and budgets to assess the performance of the farm business, and make better decisions. Income Statements Balance Sheets Enterprise budgets Cash flow budgets 10

Workshop Overview - Outcomes 4. Develop a personal risk management plan for your farm. Develop goals in each of the five risk areas Identify specific actions you will take to reach each goal Commit to follow through and implement the actions identified 11

Workshop Overview - Outcomes 5. Network with other producers in your area and learn from them as you discuss current issues of mutual importance. Share best management practices Develop network of peers Identify allied professionals who can support your risk management activities 12

Project Results - Summary The primary outcome of this educational effort was for participants to possess the skills and to understand their own operations well enough to develop personalized risk management strategies for each of the five emphasis areas (production, financial, marketing, legal, human). On the written evaluation form they reported spending an average of 21.7 hours per session for a total of hours of personal homework. Moreover, each of the 53 participants established a goal in each of the five risk emphasis areas and delineated three specific actions they would take during the next year to reach each goal. 43 participants completed all of the actions in their plans 10 participants have planned actions yet to complete 13

Project Results - Summa ry A secondary outcome of this project was to develop and foster a long-term working relationship between the farmer participants and the local educators (Extension Associates). Moreover, this educational approach also improves the skills of these educators. The personal interaction of these farmers with the local Extension Associates as designed in this project has the potential of creating long-lasting relationships that will be mutually beneficial. 14

Project Results - Summary One very important indicator of success was the strong participation by the participants who returned each time and actively participated in each of the three workshops. At the conclusion of the last workshop several farmers commented orally and on the written evaluation form that they were grateful for the opportunity to participate, had learned more than expected, and wished the series could continue on a regular basis. 15

Farmer and Rancher Testimonials “My wife and I found the Risk Management Project very beneficial in a number of ways. It caused us to view our farm as a business and not just a hobby. It forced us to improve our record keeping, and to inventory the resources on our farm. We discovered that we have a lot of equipment not being fully utilized. Also, being a certified organic farmer, this risk management project has helped us to stay on point with everything that we put in the ground making it easier for us to file for our recertification. This project also made sure that we kept up with our insurance. This has proven to be very important.” John and Mary Culbreath, Organic Farmers form Williamsburg County 16

Farmer and Rancher Testimonials 17 “This workshop was very beneficial to me. I learned many recordkeeping techniques and procedures to help my farm run properly and efficiently. Learning about all of the risk areas has been very informative and helpful. This workshop actually helped us resolve a very necessary legal risk in that we had our wills written up since attending the workshop.” Mark and Tammie Jackson, Vegetable Farmers from Orangeburg County

Farmer and Rancher Success Story “The Risk Management class has helped us to become more aware of the need to establish a local market, and provided us the skills to do so. We had been selling locally, mostly to friends and relatives. As part of a class assignment, we began to look into more stable markets. Now we have widened our sales to Daycare Centers and Churches, which are more reliable and constant markets. We would have never thought of these markets without the help of the risk management class. We came up with these ideas through brainstorming with our group, and completing the homework assignments. We have become more aware of what we have to do to reach our goals for the farm.” Malzo Heyward, Vegetable farmer from Hampton County 18

Involved Local Extension Educators 19

Traditional classroom instruction was an important part of each workshop 20

Formed small groups by commodities 21

Small groups learned from each other, and developed networking opportunities 22

Workshop leaders monitored individual discussions and helped maintain focus 23

Participants challenged, yet strengthened each other during their discussions 24

Provided one-on-one instruction and assisted the small group discussions 25

Required writing and individual work 26

Extension Educators followed up with the farmers they recruited to participate 27

Recognized their accomplishment by providing Graduation Certificates 28

Keys to Success Formed and worked with Steering Committee Involved local Extension Educators Conducted needs assessment of producers Tailored workshop content to local needs/interest Participant involvement; discussion; writing Followed up on an individual basis to provide encouragement and assistance Required active participation by attendees Required accountability at each phase of project Recognized participant accomplishments 29

Project Challenges/Improvements Meeting current needs at individual level The good and bad of homogeneity Motivating personal action—writing is critical More involvement of local allied professionals (lenders, insurance agents, estate planners, etc.) Maintaining focus Continue the relationship after the funding has ended 30

Project Challenges/Improvements Comments Questions Discussion 31