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THE NCAT MISSION

Can Crop insurance Work to Lower Production and Price Risk of Diversified Farms? Lessons Learned from the AGR- Lite Wizard Project Jeff Schahczenski , Agricultural Economist National Center for Appropriate Technology. THE NCAT MISSION

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THE NCAT MISSION

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  1. Can Crop insurance Work to Lower Production and Price Risk of Diversified Farms? Lessons Learned from the AGR-Lite Wizard ProjectJeff Schahczenski, Agricultural EconomistNational Center for Appropriate Technology

  2. THE NCAT MISSION Helping People by championing small-scale, local, and sustainable solutions to reduce poverty, promote healthy communities, and protect natural resources. www.ncat.org

  3. ATTRA National Sustainable Agriculture Information System Need help with flame weeding? Are you ready to start selling your produce at the farmers market? Need some help with any sustainable-Ag issue? Simply call our English-language ATTRA toll-free hotline at 800-346-9140 or the Spanish-language ATTRA hotline at 800-411-3222 for expert advice. ...or use the Ask An Ag Expert tool to send us a note.

  4. Why Insure Crops and Livestock?October 2011

  5. September 2012

  6. January 2013

  7. This Crop Year Already

  8. Important National Benefit for Agriculture • In 2010 it was predicted that the federal subsidization of crop Insurance premiums could be close to $9 billion dollars per year through 2022. • Average premium benefit is about 62% of the cost. • In 2012 premium subsidy was almost $7 billion dollars- Payouts highest ever over $16 billion dollars and counting

  9. Is Whole Farm Revenue Insurance an answer?

  10. Sustainability-Resilient Diversity “In every deliberation, we must consider the impact on the seventh generation... even if it requires having skin as thick as the bark of a pine.” —Great Law of the Iroquois” • Resiliency • Diversity • Adaptable • Interdependence

  11. Commercial Farms

  12. Farm Profitability

  13. Is Good Crop Insurance for Diverse Farms Possible? • “Good”- meaning reasonably priced and with effective coverage • “Good”- meaning as good as current commodity or specialty crop-based policies

  14. Why Insure Crops- Price Volitility

  15. What is Insured Nationally- 2012

  16. Field Corn Crop Insurance

  17. Fresh Market Tomatoes Crop Insurance

  18. Why Whole Farm Revenue InsuranceAdjusted Gross Revenue Lite • Crops with no Multi-Peril (Yield) or Revenue Insurance • Commodities with premium prices • Organic and specialty crops • Varietal differences in yield and price • Provides for quality losses • Livestock

  19. Three Cases from Maryland • AGR-lite for small diverse organic vegetable and livestock farm • AGR-lite for wholesale larger organic vegetable farm compared to individual policies • AGR-lite for organic grain farm vs. individual policies

  20. Case 1- Maryland Diverse Organic Farm • 72- 6’ x 350’ beds ~ 3.6 acres • Basil, Kale, Beets, Potatoes, Winter Squash, Onions, Carrots, Tomatoes • 15 Bee hives • 60 Laying hens (eggs) • $62,400 in projected gross revenue for 2013 Loss Scenario: 50% loss of honey yield, 50% loss due to egg price drop, 80% loss onion yield, 50% loss in tomato yield and 50% loss carrot price and yield

  21. Case 2- Maryland Wholesale Organic Farm • 130 acres organic processing sweet corn • 30 acres organic fresh market tomatoes • 60 acres organic green peas • 8 acres of organic apples Loss Scenario: 50% yield or price loss on all crops

  22. Case 3- Maryland Organic Grain Farm • 85 acres of organic wheat • 110 acres of organic field corn • 60 acres of organic soybeans Loss Scenario: 50% loss yield or price on all crops

  23. AGR-Lite Wizard • CD available for PC (no Mac version) - Sept. 15th for 2013 • www.agrlitewizard.com

  24. Case 1- Small Organic Vegetable and Livestock Results

  25. Case 1- Small Organic Vegetable and Livestock Results

  26. Case 2- Organic Wholesale Results

  27. Case 2- Organic Wholesale Results

  28. Case 3- Organic Grain Result

  29. Case 3- Organic Grain Result

  30. Critical Improvements • Coverage too low- or deductable to high • Premium costs do not decline with diversity • Application process and information intensity needs to be lowered---AGR-lite Wizard helps • Whole farm revenue should be available nationwide

  31. 2012 Senate Farm Bill

  32. Summary • Whole farm revenue can work well for some diverse farms as is. With improvements it would be used more extensively • Crop based insurance pick’s winner’s and promotes specialization rather than diversity

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