$2 million investment to mitigate agricultural risks

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USDA is injecting $2 million into education programs for those underserved in the agriculture industry.

GRAND RAPIDS, Mich. — GRBJ — Farmers in Michigan will soon be able to participate in new educational risk management programs while navigating the agricultural industry.

The United States Department of Agriculture (USDA) invests up to $2 million in cooperative agreements for risk management education and training programs. Programs and trainings are geared towards historically underserved producers, smallholders and conservation practices.

Underserved producers include farmers or ranchers with limited resources, beginning farmers or ranchers, socially disadvantaged farmers or ranchers, and veteran farmers or ranchers who have served in the Army, Navy, Marine Corps , Air Force or United States Coast Guard.

Small farmers are those with a gross cash farm income of less than $250,000. Some of the conservation practices that farmers or ranchers participate in include conservation tillage, cover crops, and stream restoration.

The USDA’s Risk Management Agency (RMA) will use the funds to invest in organizations such as nonprofits, universities, and county cooperative extension offices to develop training and education tools. education to help growers learn how to effectively manage long-term risks and challenges.

“Farming is an inherently risky business, and a strong agricultural safety net is essential to sustaining and ensuring the success of American producers,” said Marcia Bunger, RMA administrator. “We are committed to improving access to crop insurance, and our partnerships with organizations help us reach communities that have historically lacked access to training and resources. We want to make sure that all growers know and understand how to manage risk and what options are available to them.

Risk management training sessions will include information on federal crop insurance options, record keeping, financial management, non-insurance-based risk management tools, and natural disaster preparedness.

Some risks in the agriculture industry include production, price or market fluctuations, financial, institutional, and human or personal risks, according to the USDA Economic Research Service.

  • Production risk arises from the uncertain natural growth processes of crops and livestock. Weather conditions, diseases, pests and other factors affect both the quantity and the quality of the food produced.
  • Price or market risk refers to the uncertainty about the prices producers will receive for commodities or the prices they must pay for inputs. The nature of price risk varies considerably from product to product.
  • Financial risk arises when the farm business borrows money and creates an obligation to repay the debt. Rising interest rates, the possibility that loans will be requested by lenders and the restricted availability of credit are also aspects of financial risk.
  • Institutional risk results from uncertainties surrounding government actions. Tax laws, regulations on the use of chemicals, animal waste disposal rules, and the level of price or income support payments are examples of government decisions that can have a major impact on the agricultural business.
  • Human or personal risk refers to factors such as human health or personal relationship issues that can affect the farming business. Accidents, illness, death and divorce are examples of personal crises that can threaten a farm business.

Organizations should apply by March 11 at www.rvs.umn.edu/home.aspx. The RMA prioritizes projects focused on underserved organic and specialty crop growers.

Agriculture is one of Michigan’s major industries. According to the Michigan Department of Agriculture and Rural Development, it contributes more than $104.7 billion annually to the state’s economy, second in diversity only to California. Some of the major crops produced by the state are asparagus, black beans and cranberries, cucumbers, tart cherries, Niagara grapes, and squash.

More information about the USDA Risk Management Agency is available here.

This story first appeared in the Grand Rapids Business Journal.

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