Risk Management Workshops in MD 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 53% of corn acres and 58% of soybean acres insured in 1999 despite severe drought in 97 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 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 Farmer Loss ratios 3.2 for corn, 1.6 of soybeans, and 2.7 for all crops

Agricultural Risk Protection Act of 2000 Increased premium subsidies Increased premium subsidies Authorized higher coverage levels Authorized higher coverage levels Risk Management Education program strengthened Risk Management Education program strengthened Special Education Program for Underserved States in NE and West Special Education Program for Underserved States in NE and West Initial cooperative agreements for educational programs for 2002 in Fall, 2001 Initial cooperative agreements for educational programs for 2002 in Fall, 2001 MD Program joint with MD Dept. of Agr. MD Program joint with MD Dept. of Agr.

Possible Reasons for Low Participation Farmers lack basic understanding of crop insurance Farmers lack basic understanding of crop insurance Farmers not aware of how crop insurance fits with marketing plans Farmers not aware of how crop insurance fits with marketing plans Farmers unaware of potential returns from subsidized crop insurance over time Farmers unaware of potential returns from subsidized crop insurance over time Farmers not aware of changes in 2002 Act Farmers not aware of changes in 2002 Act Lenders, extension personnel, inputs suppliers, and others uninformed about crop insurance Lenders, extension personnel, inputs suppliers, and others uninformed about crop insurance Insufficient time to delineate importance of above reasons Insufficient time to delineate importance of above reasons

Farm Structure in MD Small diverse state with 12,000 farms Small diverse state with 12,000 farms About 1,260 farms with sales above $100,000 About 1,260 farms with sales above $100,000 Eastern Shore, Between the Atlantic and Chesapeake Bay, a “little corn belt” with broilers Eastern Shore, Between the Atlantic and Chesapeake Bay, a “little corn belt” with broilers Central MD in Baltimore-DC corridor Central MD in Baltimore-DC corridor Dairy farms in Central and Western MD Dairy farms in Central and Western MD Mostly forested in the West Mostly forested in the West 23 Counties 23 Counties

Structure of Educational Program Retired former county agent and regional farm management specialist hired as extension associate Retired former county agent and regional farm management specialist hired as extension associate Grants to counties to assist with planning and implementation of workshops Grants to counties to assist with planning and implementation of workshops MDA provided publicity about crop insurance and the educational program MDA provided publicity about crop insurance and the educational program

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

Scheduled Meetings Short talks by Musser or Extension Associate Short talks by Musser or Extension Associate Distributed RMA Fact Sheets and other handouts on crop insurance Distributed RMA Fact Sheets and other handouts on crop insurance Purpose: Increase awareness of current crop insurance products Purpose: Increase awareness of current crop insurance products Attended 10 meetings with participants Attended 10 meetings with participants

Workshops Two for Agribusiness and Government in Dec Two for Agribusiness and Government in Dec Nine for Farmers in Jan-Feb, 2002 Nine for Farmers in Jan-Feb, 2002 Six regional meetings in Eastern Shore, Central, and Southern MD Six regional meetings in Eastern Shore, Central, and Southern MD Three county meetings in Western MD Three county meetings in Western MD

Planning Workshops Sites and Dates chosen by County Agents and coordinated by Extension Associate Sites and Dates chosen by County Agents and coordinated by Extension Associate Dates that did not conflict with other activities Dates that did not conflict with other activities Nine to twelve thirty for workshops 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 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 Grants to host counties for local meeting expenses

Promotion of Workshops Local county newsletters, papers, and oral announcements Local county newsletters, papers, and oral announcements MDA mailed an announcement to all farmers on their mailing list MDA mailed an announcement to all farmers on their mailing list MDA distributed a press release MDA distributed a press release National Crop Insurance Services mailed an announcement to crop insurance agents National Crop Insurance Services mailed an announcement to crop insurance agents Announced in appearances at regularly scheduled meetings Announced in appearances at regularly scheduled meetings

Workshop Curriculum Used existing publications and research Used existing publications and research Distributed notebook Distributed notebook Slides for presentations Slides for presentations List of crop insurance agents List of crop insurance agents RMA Fact Sheets RMA Fact Sheets Other crop insurance and risk management educational material Other crop insurance and risk management educational material

Presentations Related to Perceived Reasons for Low Participation Returns to crop insurance over time Returns to crop insurance over time Basics of crop insurance in MD Basics of crop insurance in MD Adjusted gross revenue insurance Adjusted gross revenue insurance Marketing and crop insurance Marketing and crop insurance Farmer panel on crop insurance experiences Farmer panel on crop insurance experiences Crop insurance agents to answer questions Crop insurance agents to answer questions

Presenters Musser Musser Haigh Haigh RMA personnel RMA personnel Local farmers selected by county agents Local farmers selected by county agents

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

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

They Bought More Insurance in 2002! Percent insured corn acres increased to 63.1% from 54% in 2001 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) Percent of insured acres for all crops increased to 51% in 2002 (47% in 2001) Level of coverage also increased Level of coverage also increased Corn Liability Protection Increased 32% Corn Liability Protection Increased 32% Liability for all crops increased nearly twice that of corn Liability for all crops increased nearly twice that of corn

Severe Drought in 2002 Year Corn Yield Soybean Yield

They collected record indemnities $22.6 million in $22.6 million in $22.6 million for 2002 as of 3/24/03 $22.6 million for 2002 as of 3/24/03 Farmer Loss Ratio of 7.45 Farmer Loss Ratio of AGR, 9 GRP, and other policies still to report 19 AGR, 9 GRP, and other policies still to report $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 CAT 60,000 A of corn and 108,000 A of beans in CAT

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 Regional Crop Insurance Policy Conference in 9/02---see Crop-Insurance-and-Farm-Policy- Conference/arechome.htm Regional Crop Insurance Policy Conference in 9/02---see Crop-Insurance-and-Farm-Policy- Conference/arechome.htm Crop-Insurance-and-Farm-Policy- Conference/arechome.htm Crop-Insurance-and-Farm-Policy- Conference/arechome.htm Farm Bill Workshops in Aug Farm Bill Workshops in Aug

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

Speakers Five AREC Extension Specialists Five AREC Extension Specialists FSA Rep FSA Rep NRCS Rep NRCS Rep

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

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

Model Worked Three Times Extension Associate and County Agents organize sites and dates Extension Associate and County Agents organize sites and dates Free Morning Coffee and Noon Meal Free Morning Coffee and Noon Meal Grants to County Offices for publicity and meeting expenses Grants to County Offices for publicity and meeting expenses Publicity from MD Dept of Agriculture Publicity from MD Dept of Agriculture Presentations from Extension Specialists, Federal Agencies, and Industry Presentations from Extension Specialists, Federal Agencies, and Industry What Else? What Else?

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