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

2. Your farm business faces many kinds of risks
University of California Cooperative Extension: Publication C

3. 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

4. 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

5. 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

6. 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

7. 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.

8. 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

9. Regarding crops, why Insure?

11. 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

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

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

14. One Way to look at Your Options

15. 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

16. 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

17. Equal opportunity provider and employer
Contact Information
UConn Extension:
CT Department of Agriculture:
CT Farm Bureau
CT Department of Public Health
Center for Disease Control and Prevention:
Risk Management Agency USDA:
APHIS USDA
CT Farm Risk Management Program:
Equal opportunity provider and employer

18. Thank You
Questions?