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Farm Risk Management & Farmer Survey

Addressing risk is critical to the survival of family farms. Each year, farmers must rise to meet the inevitable challenges of poor weather, market volatility, and natural disasters. Better risk management can save farms and help changing rural economies thrive.

Online Risk Management Resources for Farms:

USDA Resources for Farms:

Attention Farmers!

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Risk Management is Crucial for Sustainable Agriculture to Thrive

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Sustainable farming has limited access to risk management and lending programs because the world of risk is based on actuarial analysis rather than field research on agricultural production practices. Based on actuarial analysis alone, to a banker, 1,000 acres of mono-crop corn is a much safer investment than a diversified, mixed crop and livestock operation. This is because the banker does not take into account the benefit or value of employing agricultural production methods that have been proven to mitigate risk. Yet, many innovative sustainable farmers and researchers have tested and confirmed the risk mitigation value and multiple benefits associated with diversification, integrated production, soil quality and conservation, and a host of sustainable practices.

What RAFI Does to Support Better Risk Management Policies & Practices

Each year, farmers must rise to meet the inevitable challenges of poor weather, market volatility, and natural disasters. RAFI supports farmers in developing and accessing better risk management practices through three key areas: advocacy, research, and policy development.

We do this work not only because crop insurance can help farmers survive severe weather and manage risk but because it can also pave the way to other risk management tools, most notably agricultural credit. Historically crop insurance has best served commodity growers in the Midwest, but we work to ensure that it serves a diverse set of farmers including commodity growers but also specialty, organic, direct market, and diversified farmers.Farmers, particularly those who employ sustainable agricultural production methods, are often not eligible for risk management and lending programs.

Our work in risk management is designed to address these challenges:

Our work is focused on researching, promoting and developing risk management models that will reward, and not penalize, farmers for practicing sustainable, production-based risk management.  Research and advocacy efforts are informed by our experience working directly with farmers and stakeholder. We also develop resources about risk management and offer risk management education for farmers.

Current Projects & Initiatives

Risk Analysis
RAFI is looking intensively at the risk implications of sustainable farming practices, focusing on access to risk management for beginning farmers. The goal of this work is to incentivize sustainable, production-based risk management in crop insurance and lending practices, thereby reducing the risk of moral hazard and opening sustainable agriculture to new risk management options.

Crop Insurance Development
RAFI is working with the North Carolina Strawberry Association to develop a crop insurance policy for strawberries in North Carolina. Strawberries are particularly risky because of the upfront investment and the amount of time crops spend in the field before harvest. Strawberries are not currently covered by a single crop policy in North Carolina, which limits risk management and credit options for strawberry growers.

Risk Management Education
RAFI’s risk management research suggests that family farmers are not being provided the resources needed to make informed risk management decisions. In a 2012 RAFI survey of 157 specialty crop growers, over 65 percent reported “little or no knowledge of crop insurance.”

Given the importance risk management plays in both income security and access to credit, this information gap must be addressed. RAFI has organized a variety of workshops and events designed to educate farmers on crop insurance and risk management:

RAFI’s “Resource Rodeos“ events brought farmers and resource providers together in an informal setting to discuss financial and legal topics related to farm enterprises. Funded by a generous grant from the Southern Risk Management Education Center (SRMEC), our Resource Rodeos reached farmers and resource providers across NC in 2012 and 2013.

Resourceful Farmer Workshop (June 2015) Do you have a plan for managing risk on your farm? Join RAFI staff members in discussing crucial farm risk management issues and develop a plan for better addressing risk on your farm.

RAFI Publications:

Recent Articles on Crop Insurance from the RAFI Blog:

 More on this topic:

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