Managing your Farm Risks Joseph Bonelli UConn Extension August 24, 2016

Your farm business faces many kinds of risks University of California Cooperative Extension: Publication 31-141C

Production Risk Your ability to manage the quality and quantity of products and services you offer For example, you may consider: Adopting new technology Crop diversification Adopting sustainable practices Enhancing soil health Other

Financial Risk Your ability to generate the required level of income to maintain cash flow to be able to cover the costs of production and overhead as well as family living needs For example, you may consider: Financial analysis Business planning Other

Human Resources Risk Your ability to communicate effectively with family and non-family labor For example, you may consider: The Four D’s: Divorce, disagreement, death, disability and how they can impact your business Developing an employee organization chart and training program Child proofing your farm yard Adopting an employee safety program Succession planning Other

Market (price) Risk Uncertainty in the market. Relates to your ability to develop a marketing approach adequate to maintain business viability For example, you may consider: Developing a marketing plan Responding to changes in customer demographics Niche marketing, value added marketing Completing a S.W.O.T. analysis Direct marketing Other

Legal Risk Your ability to be in compliance with rules, laws, regulations, contractual arrangements, etc. For example, you may consider the following issues: Business organization, rental arrangements Taxes (income, succession, payroll, etc.) Compliance and environment issues Tort Other Remember: Always seek legal advice from a qualified attorney and/or CPA on all legal and tax related issues.

Ways to Mitigate your Risk Transfer the risk: For example: Purchase crop insurance: WFRP, MPCI, NAP Purchase liability and product insurance Purchase other kinds of insurance Remember: Always tell your insurance agent exactly what you are doing on your farm to ensure proper and adequate levels of insurance coverage

Regarding crops, why Insure?

Ways to Mitigate your Risk Reduce the risk: For example: Consider crop diversification Consider vertical integration Adopt new farming practices Implement appropriate food, animal, and other safety practices Plan for adequate water supply

Ways to Mitigate your Risk Avoid the risk Eliminate a particular practice or action

Ways to Mitigate your Risk Retain the risk: Accept the risk after considering your risk mitigation options

One Way to look at Your Options

Remember Consider your own tolerance for risk when making a decision on how to best manage risk on your farm Before implementing a strategy to manage a particular risk, do your research. Keep up to date on regulations and new technology Ask questions

Remember 4. Consider all of your options. Understand the impact of each option to manage risk on your business 5. Pick and then implement the best option that will help to achieve your goals 6. Monitor results 7. Make changes as necessary

Equal opportunity provider and employer Contact Information UConn Extension: www.extension.uconn.edu CT Department of Agriculture: www.ct.gov/doag CT Farm Bureau https://www.cfba.org/ CT Department of Public Health http://www.ct.gov/dph/site/default.asp Center for Disease Control and Prevention: http://www.cdc.gov/ Risk Management Agency USDA: www.rma.usda.gov APHIS USDA https://www.aphis.usda.gov/aphis/home/ CT Farm Risk Management Program: www.ctfarmrisk.uconn.edu Equal opportunity provider and employer

Thank You Questions?