BEGINNING FARMERS PROGRAM AUGUST 10, 2013 Risk Management Planning

Risk Risk is the potential of loss resulting from a given action, activity and/or inaction. -- Wikipedia You can make the best decision and have a bad result.

Types of Risk Production Risk Marketing Risk Financial Risk Human Risk Legal Risk

Production Risk Diversification Alternative, and Sustainable Agriculture  New Technologies and Inputs  Energy, nursery, organics, equipment Crop Production  Weather, pests, equipment breakdowns, others Insurance  Crop and Livestock Insurance  Property and liability insurance  Health and disability insurance

Basic crop insurance At a minimum, growers should purchase “Catastrophic Coverage” (CAT) for eligible crops, and “Non-Insured Crop Disaster Assistance” (NAP) for crops that cannot be insured under CAT. Although these programs don’t offer a high degree of protection, they do help in case of serious crop failures, they are very affordable, and they make you eligible for assistance in the event of disasters like widespread drought or flood. Additional crop insurance beyond CAT or NAP may be worth the additional cost to you, but it takes time to figure out these costs and benefits. If you don’t have that time, at least get CAT or NAP coverage.

Good Agricultural Practices

Marketing Plan Financial Condition and Goals: Price Goals (Break-even / Family Living / Profit and Growth Needs) Market Outlook/Expectations (fundamental, technical, seasonal) Production Risk Tools Price Risk Tools/Alternatives Price and Date Objectives Strategies

Financing Risk Good reference Financing Small-scale and Part-time Farms  Using other peoples’ money  Leases  Loans

Human Risk Personal/Family Employees Pesticides

Legal Risk Business Organization Renting and Leasing Contracting Environmental Taxes Bankruptcy Succession Planning