STUDY SHOWS MANY UNDERSERVED PRODUCERS ARE UNAWARE OF RISK MANAGEMENT TOOLS

WASHINGTON, Jan 15, 2003 - Farmers and ranchers in underserved states believe that their risk management "toolbox" is inadequate for the risks they face, but are often unaware of available programs and products, a recent major study concluded.

The study revealed that 69 percent of field crop producers and 78 percent of ranchers in the underserved states identified marketing risks as the greatest risk to their operations. Of those percentages, 46 percent of field crop producers and 37 percent of ranchers felt that low prices were their primary risk.

Producers also identified production risks as the second greatest risk to their operations. Sixty-four percent of hay and silage producers and 57 percent of field crop producers in the underserved states identified marketing risks as the second greatest risk to their operations. Of those percentages, 48 percent of hay and silage producers and 44 percent of poultry producers felt that yield shortfalls were their secondary risk.

Although their main focus was on production and marketing risks, producers are also concerned with environmental/regulatory issues. Seventy-six percent of nursery/greenhouse growers and 63 percent of sheep producers in the underserved states identified these types of risks as next in importance for their operations.

The study, recently completed by SJH & Company, Inc., of Danvers, Mass., was commissioned by RMA in response to a provision of the Agricultural Risk Protection Act of 2000, which directed the agency to reach out to states that have been historically underserved with respect to crop insurance.

A primary purpose of the study was to assess the risk management education and information needs in the underserved states. The study also assessed the risk management skills of producers, the partnerships currently being formed to raise risk awareness, and the various delivery channels available for conveying information on crop insurance and other risk management tools.

The states designated in the law as underserved are: Connecticut, Delaware, Maine, Maryland, Massachusetts, Nevada, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Utah, Vermont, West Virginia, and Wyoming.

See SJH study (PDF).