Developing Personal Risk Management Plans
Laurence M. Crane
National Crop Insurance Services
Albert Essel
Delaware State University
Henry English
University of Arkansas—Pine Bluff
Anthony Reed
Alcorn State University
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Project Overview
• Funding for this project was provided to National Crop
Insurance Services (NCIS) through a competitively awarded
Commodity Partnership Agreement from the USDA Risk
Management Agency (RMA).
• NCIS is a not-for-profit national trade association located
in Overland Park, Kansas, and is the primary service
organization for the crop insurance industry.
• We (crop insurance industry) take very seriously the
responsibility we have as the delivery system for the
Federal crop insurance program.
• Recognize the value of working with others/educators in
providing objective educational information.
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Underlying Educational Philosophy
A concentrated and hands-on approach to education typically
leads to long-term behavioral change, and is consistent with
the philosophy that behavior changes are more likely with
sustained personal support.
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Project Overview - Objectives
• The goal of this project was to assist Limited
Resource and African American Producers of
Specialty Crops and Underserved Commodities in
Arkansas and Mississippi respond to risk in the five
special emphasis areas of production, marketing,
financial, legal, and human resource management.
• An applied education program consisting of
workshops and individualized counseling was
developed and conducted via a partnership of
trainers, state host coordinators (SHC) and local
educators (LE).
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Project Overview - Objectives
• Specific project objectives were to use a business planning
approach to:
(1) Review risk management principles, practices, and tools to
familiarize producers with how they can be effectively
applied in a holistic approach to their farm situation,
(2) Assist producers in conducting an effective risk assessment of
their own farm business,
(3) Inform producers of alternative risk management strategies,
(4) Assist producers with formation and adoption of their own
individualized risk response strategy, and,
(5) Review the financial implications and legal considerations of
their chosen strategy.
• These objectives were met through instruction, discussion,
interactive group activities, and personal homework assignments.
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Project Process - Structure
Planning
• Formed project Steering Committee
• Project Director—Laurence Crane
• Project Co-Director—Albert Essel
• State Host Coordinators
• Arkansas—Henry English
• Mississippi—Anthony Reed
• Held face-to-face project Planning Meeting with
follow-up conference calls
• Worked out project logistics
• Workshop locations, dates, promotion, etc.
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Identified personnel (Local Extension Educators)
Needs assessment discussion—established priorities
Determined workshop content, structure, and outcomes
Established deadlines, responsibilities, expectations
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Workshop Overview - Structure
Workshops
• There were three structured workshops
• One month apart (approximately)
• Six hours each (9:00-4:00)
• Consisted of instruction, case demonstration, group
discussion, interaction, and networking
• Same farmers came to all three workshops
Individualized Study
• Homework assignments following each workshop
• Take approximately 20 hours to complete
• Assisted/supported by Local Educators (LE)
• Selected area(s) where you wish to focus
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Workshop Overview - Outcomes
1. Be introduced to the farm business planning process and
learn how to:
• Identify and list all of their farms assets and their
productive capacity
• Determine the current wellbeing of the farm business
• Review the feasibility of alternative enterprises
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Workshop Overview - Outcomes
2. Be introduced to five areas of risk and learn how to
identify, measure, and mange risks on their farms in these
areas:
• Production risks
• Marketing risks
• Financial risks
• Human resource risks
• Legal risks
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Workshop Overview - Outcomes
3. Understand financial management of the farm and how
to use financial statements and budgets to assess the
performance of the farm business, and make better
decisions.
• Income Statements
• Balance Sheets
• Enterprise budgets
• Cash flow budgets
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Workshop Overview - Outcomes
4. Develop a personal risk management plan for your farm.
• Develop goals in each of the five risk areas
• Identify specific actions you will take to reach each goal
• Commit to follow through and implement the actions
identified
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Workshop Overview - Outcomes
5. Network with other producers in your area and learn
from them as you discuss current issues of mutual
importance.
• Share best management practices
• Develop network of peers
• Identify allied professionals who can support your
risk management activities
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Project Results - Summary
The primary outcome of this educational effort was for
participants to possess the skills and to understand their
own operations well enough to develop personalized
risk management strategies for each of the five emphasis
areas (production, financial, marketing, legal, human).
On the written evaluation form they reported spending
an average of 22.4 hours per session for a total of 67.4
hours of personal homework. Moreover, each of the 52
participants established a goal in each of the five risk
emphasis areas and delineated three specific actions
they would take during the next year to reach each goal.
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Project Results - Summary
A secondary outcome of this project was to develop
and foster a long-term working relationship between
the farmer participants and the local educators
(Extension Associates). Moreover, this educational
approach also improves the skills of these educators.
The personal interaction of these farmers with the
local Extension Associates as designed in this project
has the potential of creating long-lasting
relationships that will be mutually beneficial.
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Project Results - Summary
One very important indicator of success was the
strong participation by the participants who
returned each time and actively participated in each
of the three workshops.
At the conclusion of the last workshop several
farmers commented orally and on the written
evaluation form that they were grateful for the
opportunity to participate, had learned more than
expected, and wished the series could continue on a
regular basis.
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Farmer and Rancher Testimonials
“This is what I learned from the risk
management class. The first exercise
was one of the best I had, because it
helped me realize I really didn’t know
what I had for assets. The lesson for
that week was to go home and look at
everything and do an inventory and
see what assets you have. What I
learned really surprised me. This was
a really great class to do. I learned
about risk management, and about
asset and liability management. I
would tell everybody—If you are into
farming, you need to take this class.”
Keith January, Sr.,
Fayette,
Jefferson County, Mississippi
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Farmer and Rancher Testimonials
“This workshop has been most helpful
to me because I have learned the
different aspects of risk management
on a farm. There are great aspects of
record keeping, and financial record
keeping is one of the most important
things in taking care of the business on
the farm.”
Sandra Bennett,
Madison County, Mississippi
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Farmer and Rancher Testimonials
“I enjoyed participating in the
workshops. I learned a lot about
business planning as well as risk and
goal setting and asset management;
basically what is being looked at by
bankers and other people these days in
agriculture. I’m glad I participated in
the program and thankful that Alcorn
State University invited me to
participate and it should be very
beneficial to me.”
Louis Sanders,
Mound Bayou,
Bolivar County, Mississippi
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Arkansas Participants
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Mississippi Participants
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Involved Local Extension Educators
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Traditional classroom instruction was an
important part of each workshop
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Formed small groups by commodities
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Small groups learned from each other,
and developed networking opportunities
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Workshop leaders monitored individual
discussions and helped maintain focus
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Participants challenged, yet strengthened
each other during their discussions
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Provided one-on-one instruction and
assisted the small group discussions
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Required writing and individual work
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Extension Educators followed up with
the farmers they recruited to participate
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Recognized their accomplishment by
providing Graduation Certificates
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Keys to Success
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Formed and worked with Steering Committee
Involved local Extension Educators
Conducted needs assessment of producers
Tailored workshop content to local needs/interest
Participant involvement; discussion; writing
Followed up on an individual basis to provide
encouragement and assistance
• Required active participation by attendees
• Required accountability at each phase of project
• Recognized participant accomplishments
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Project Challenges/Improvements
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Meeting current needs at individual level
The good and bad of homogeneity
Motivating personal action—writing is critical
More involvement of local allied professionals
(lenders, insurance agents, estate planners, etc.)
• Maintaining focus
• Continue the relationship after the funding has
ended
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Project Challenges/Improvements
Comments
Questions
Discussion
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