Risk Management Programming: Is it Effective at Creating Change? Kynda Curtis Assistant Professor & State Specialist University of Nevada, Reno

Introduction Risk management education spending Literature on education impact Nevada experience Knowledge gain Factors on near-term RM usage Factors on longer-term RM usage Conclusions

Risk Management Education Spending Is it working?

Impact Literature Producer attitudes toward risk & risk management topics of concern Hall, Knight, Coble, Baquet, & Patrick (2003) –1313 beef producers –Age, prior use, previous attendance, risk aversion –Draught & cattle pricing most important Understocking pasture & hay storage Eberspacher & Jose (2005) –Focus groups, NC RMEC –Labor issues, value-added, estate planning, farm transfer…

Impact Literature Covitt, Gomez-Schmidt & Zint (2005) –11 risk related activities in school –Measure with pre-post testing –Improved understanding of risk, question in-depth knowledge gain? Bastian, Nagler, Hewlett, & Weigel (2006) –40 producers in 4 risk management sessions –Pre & post-testing, pre & post evaluations, 2 month follow- up evaluations –75% had completed 8 of 20 evaluation options to reduce risk…

Nevada Experience Risk management programming 2004/2005 to 2006/ workshops Topics –General risk management Financials, water issues, futures/options, business planning, value-added & niche marketing… –Estate & farm transition planning –Human resource management –Niche livestock marketing –Livestock production Animal ID, cattle handling, etc.

Program Evaluation Methods Pre-workshop test (content knowledge) Post-workshop test Post-workshop evaluation –Attitudes, usefulness, recommendation, speaker/content evaluations Six-month follow-up evaluation –Attitudes, usefulness, recommendation, use/implementation of knowledge/skills

Pre & Post Testing General Risk Management Workshop Pre and Post- Test Scores, 2005 (2 day)

Pre & Post Testing Estate & Farm Transition Planning Seminar Pre and Post-Test Scores, 2006 (1 day) Estate & Farm Transition Planning Seminar Pre and Post-Test Scores, 2007 (2 day)

Pre & Post Testing Human Resource Management Seminar Pre and Post-Test Scores, 2006 (1 day)

Post-Seminar Evaluations 48.66% 80.67% 93.33%

What influences the amount of material to be used in job/operation? Ordered Probit Model Probit Model* 150 observations

Marginal Effects on Probit Model A 1 unit increase in How Helpful leads to a 17.7% increase in potential usage A 1 unit increase in Instructor Rating leads to a 27% increase in potential usage

6 Month Follow-Up Evaluations 18.55% 50.52% 70.10% 89.69%

Financial Changes 20% noted financial improvement by applying RM techniques learned in workshops –10% on average increases in profits –Too soon to tell Non-financial –Increased understanding of risk management factors & alternatives, marketing trends, communication needs….

What influenced the amount of material used in job/operation? Ordered Logit Model (97 observations)

Probabilities of Use Normal Participant: Producer, use of RM techniques equals 62%, would attend future RM programs, rating of importance of RM in agriculture today is a 6 (of 7)

Conclusions Pre & post testing show short-term knowledge gain –Program length has little effect Near term usage impact –Usefulness, instructor, content… Longer-term usage impact –Attitudes toward risk management –Wish for further education –Program type/length not important Improved financial & non-financial situation…