Open Season for Farm Revenue Insurance

by John Berry, Extension Educator, Lehigh County

Crop insurance has become the risk-management tool of choice for many farmers, because it works. The program was created to ensure that the private sector would help shoulder part of agriculture’s risk.

Crop insurance not only prevents taxpayers from shouldering the full burden of a farm disaster, but also gets payments to farmers relatively quickly. Mother Nature does not just strike large crop farms and a crop-insurance indemnity does not make a farmer or rancher ‘whole’ any more than a check from an insurance company replaces a house lost in a tornado. However, the AGR and AGR-Lite insurance products are intended to benefit the diverse and sometimes modest sized farms on the east coast.

Crop insurance is a public-private partnership, designed to ensure that when disaster strikes, the private sector – crop insurance companies – are there to help shoulder the risk and the financial burden of rebuilding.  Crop insurance policies are purchased by the farmer and suited to the farmer’s needs, comfort with risk and financial situation.

USDA’s Risk Management Agency (RMA) recently announced the Adjusted Gross Revenue (AGR) insurance for farmers and ranchers is again being offered for 2014. The application deadline is January 31, 2014.  Current AGR policyholders also have until January 31, 2014, to make any changes to existing contracts.  AGR provides whole farm income protection under an umbrella-type policy that covers income from all crops and some livestock, provided the income from livestock and livestock products does not exceed 35 percent of total farm income.

Unlike traditional crop insurance guarantees based on yields, AGR provides a guarantee against a significant decline in overall farm income from the average of the most recent five years (2008 – 2012).  As a result of substantial premium subsidies provided by the USDA, AGR can be a very affordable way to guarantee an income flow from your farm operation.

In addition, a similar product called AGR-Lite, which crops and covers livestock and has a limitation of $1,000,000 in coverage.  AGR-Lite is available in almost all counties for the states listed above for 2014.  The sales closing date for new AGR-Lite contracts is March 15, 2014.  Current AGR-Lite policyholders also have until January 31, 2014, to make any changes to existing contracts. 

Farmers are strongly urged to contact a local crop insurance agent, as soon as possible, for more information and premium quotes for both products.  For a list of crop insurance agents, farmers may contact their local USDA Farm Service Agency office or log on to the following Risk Management Agency web site: http://www3.rma.usda.gov/tools/agents/

Learning from Consumers: Examples of Easy and Insightful Questions to Ask

In last week’s blog, I encouraged you to learn about your customers’ needs, wants, and likes.  This week I wanted to provide you with examples of questions that you might ask them and that could provide you with a great deal of valuable data. 

No matter what survey format you choose or the type of retail operation you own or manage, consider asking:

• Why do you shop at our store?
• How frequently do you visit our business?
• What additional goods do you think we should stock and that you would be interested in purchasing from us? 
• What other businesses are you visiting today?
• What events and activities do they attend/participate and how do they learn about these events/activities? 

A good bit of information could be gleaned from asking these questions, which includes identifying businesses that you could cross promote with and further build your customer base.  Responses also help you learn about festivals or celebrations where you could have a presence.  Asking customers how they learn about these events and activities is one way to identify avenues through which you could promote your products.
 
On-farm markets or farmers’ market venders might be interested in selling produce items that they have never sold before.  If you fit this description, ask consumers the following questions to learn if the product has potential:

• If we offered ‘x,’ would you be interested in purchasing it?  Why or why not?
• Do you already purchase ‘x?’  How often do you purchase ‘x’ and how do you use it in meals and snacks?
• Do you serve ‘x’ to family and friends when entertaining?  If yes, what other food items or beverages do you serve with ‘x?’ (This question can help you with cross merchandising the potential product with existing goods, or help you learn about other items you could stock.)
• How many adults and children live in your household? Of these household members, how many already eat ‘x?’

Would customers buy canning supplies from you? Don't guess, ask them.

What if a group of your customers share a similar heritage and you would like to provide them with products they could use to create authentic meals?  Consider asking questions that will help you determine the following:

• Products that are in greater demand during specific periods such as holidays, seasons, or for festivals and special occasions.
• If there is a preference for a particular variety, size, condition, type of package, or partially/fully cooked product.
• What foods, cooking tools, or particular brands they have difficulty finding locally. 

Additionally, think about what other products you could sell, even those that might be a little more “nontraditional.” For example, ask consumers about their other interests.  How many of your customers are pet owners?  Traditional garden centers have been successful selling pet products and pet foods, as there are consumers who spend a significant amount of money on their pet’s care and well being.  Pet food is also a product category that pet owners need to purchase on a frequent basis, thus they may return again and again to restock their supply.  You may also find that these goods bring new consumers to your business.

Survey Customers to Learn about Their Wants, Likes, and Needs

Over the past couple of months, I’ve spoken to audiences of small business owners and during my presentations I’ve stressed the importance of learning about their customers’ needs, wants, interests, etc.

Certainly, I understand the number of responsibilities that a small business owner has and that sometimes the staff is overwhelmed, but how will you know what products to continue to offer, which new product categories to investigate, and whether consumers like your store’s layout and design if you don’t ask them?

I would encourage you, even during this busy time of the retail year, to start learning about your customers, or reacquaint yourself with their preferences and behaviors, by asking them certain questions.  Most likely you have a standard set of questions that you ask to help build a rapport with visitors, but also consider creating a survey that could capture their responses and that you can refer to from time to time.   Begin the process by involving customers on your mail and email lists and those enrolled in your loyalty program.  If you own a tasting room, include questions on your wine club enrollment form or offer to wave the tasting fee if customers fill out a short survey.

             Before stocking something new, ask customers if they would be interested in buying the products.

In a previous post, Learning Directly From Your Customers, I described some techniques for conducting focus group session, but don’t forget that you will want responses from a larger group of consumers to make actual business decisions.  Therefore, consider collecting survey responses via the Internet.  Aside from posting questions on your website and on your Facebook business page, you could conduct an online survey using one of the many tools available: SurveyMonkey.com, Zoomerang.com, and SurveyGizmo.com. 

These and other online survey programs allow users to collect a limited number of responses for free with more features available when an annual subscription is purchased.  Don’t forget to direct customers to the survey by sending links to it in emails, incorporating the link into your webpage, or posting and promoting it on your Facebook business page and in tweets. 

In next week’s post I will provide some examples of questions that you might ask your customers.