3PM – It’s not too late!
How Do You Feel About Crop Insurance?
Almost every large ag operator is for it. As a farmer or rancher, there’s enough risk without trying to operate a business with no insurance. But what kind of farmers are eligible for crop insurance and what are the rules?
Not Every Claim is Paid
What rules determine if your crop failure is covered by crop insurance? You have to practice “Good Farming Practices.” These practices vary depending on your region and crop. But when you read the basic guidelines from the USDA Risk Management Agency, there are key takeaways.
- It’s all about stopping insect and disease issues after you spot them.
- It’s not about creating healthy soil that mitigates those problems in the first place
- It’s about using practices that don’t adversely affect crop yield
- It’s not about a higher nutritional profile for your crops
- It’s about following the advice of “experts” such as extension agents and certified crop consultants
Nowhere in the USDA guidelines does it discuss preventative measures or soil health. If an “expert” gives you advice on how to eradicate a pest or disease and you choose to go another route, such as regenerative farming or ranching practices, there’s a good chance your claims will be denied.
Most crop insurance policies cover conventional commodity crops such as corn, soybeans, and wheat. Although considerable research shows the benefits of regenerative ag, strong incentives are still in place that lock a farmer or rancher into the Status Quo ag practices. This link details the USDA definition of “good farming practices.”
Alternatives to Crop Insurance
The USDA has long had conservation incentive programs, EQIP the most notable.
These programs are akin to grants and require a farmer or rancher to submit a proposal. This isn’t all bad because it requires you to think through all the steps of a project. But it does require a lot of paperwork and writing. That takes time, and most farmers and ranchers are already working long hours.
EQIP offers both financial and technical assistance. It’s always underfunded, and projects are usually funded for 1 year. If you’re looking to improve your operation for the long haul, can you afford EQIP?
The USDA also has a Whole-Farm Revenue Protection Program. It’s supposed to supply a safety net for farmers who plant companion crops or raise animals in their fields. Even more paperwork, few farmers apply, and it doesn’t usually cover an entire farm’s revenue. It’s hard for a crop insurance salesperson to sell, and hard for a farmer to buy. But here’s the link to the USDA policy and procedure for the last year available (2023).
Specialty Crop Growers Have Expanded Coverage
The USDA RMA is expanding coverage for specialty crop growers. But it’s in the form of Enterprise Units, not based on diversity. In other words, if you grow a lot of almonds in CA or monocrops of canola in MI you may get the same crop insurance as your corn and soybean growing neighbor. But if you grow a diversity of crops? The language is unclear. It’d be best to talk to an ag insurance agent. Here’s the link for the rules for 2025.
USDA Expands Options for Specialty and Organic Growers
A diversity of fruits and vegetables is the basis for a healthy lifestyle.
When all the pros and cons are laid out about crop insurance it’s no wonder many specialty and regen farmers and ranchers aren’t covered by crop insurance. It’s not really meant for any type of ag except commodity crops.
Crop insurance is a critical risk management tool for farmers to protect against financial losses during times of natural disasters, decreased production, and low commodity prices
USDA Risk Management Agency
Crop insurance was permanently authorized in 1938 through the Federal Crop Insurance Act. Its purpose was to “promote the national welfare by improving the economic stability of agriculture through a sound system of crop insurance and providing the means for the research and experience helpful in devising and establishing such insurance.” (Origins of Crop Insurance)
We are asking farmers and ranchers to operate under a system that was established in 1938!
Why are “good farming practices” almost unchanged?
We’ve learned a great deal about soil health, nutrient cycling, and how our actions impact the soil. Regenerative farmers and ranchers are acting on new science yet are penalized for many of the practices that have proven to benefit the soil, water infiltration, and beneficial microbial growth.
How about we start incentivizing our ag producers to create predator habitats, diverse agroforestry operations, or mixed crop and livestock operations. It’s 2024 and time to change our mindset about what constitutes “good farming practices.”
Marketing Direct to Consumer for Higher ROI
Cutting out middlemen has always resulted in higher ROI. But what are the best ways to reach your audience? And how do you grow food sustainably and meet all FDA and USDA requirements? Two related and very important questions.
Selling direct to consumer is a time-honored tradition. We used to call it barter. And many small ag operations still do a bit of it. But the entire ag system is stacked against barter or even direct to consumer unless you’re willing to take almost all the risk.
The only way you can sell DTC (direct to consumer) with less risk is it you have a CSA or other cost-sharing structure. Even with a cost-sharing structure you still need to be keenly aware of the USDA and FDA regulations around food safety. This is critical if you’re selling meat DTC. More about that in a sec.
The other piece of this ag model is creating awareness of your products. You’re not selling wholesale to one person but retail to a lot of folks. How do those people find you? These days we Google everything. That means you need a strong social media and online presence.
Your social media is like a movie trailer. You want to leave your audience intrigued enough so they click through to your website, where the real information is always being updated. Your website has to WOW your buyers. You want folks to read and see and hear how truly awesome your products are. Does your copy and images leave an image of high-quality farm and range management? Do you have nutritional profile information?
A picture, and these days a video, is worth a thousand words. Your customers want to see the “behind-the-scenes” of your farm. If you get muddy, your customers want to see that you look scruffy sometimes, maybe almost all the time.
They want to know you stand for quality and you’re committed to the best customer service possible. Good food is a partnership between you and your customers.
If you’re not a professional photographer, hire one. Those superb images of garden produce and well-laid-out tables aren’t just random shots. You can become a great photographer but decide what you want to do, and what you want to delegate. You’re in the business of producing nutrient dense, tasty food. Can you also be in the business of professional photography? Maybe. But none of us can do everything ourselves.
Great things happen when we work together.
Be Sure You Know the Rules and Regulations
When you’re growing produce, fruit, or livestock there are local and national rules and regulations. Food safety standards are an important part of DTC marketing. Be sure you know them and communicate to your customers your knowledge.
When you’re transparent about how your customer’s food is produced you gain repeat customers. Certified Humane or USDA Organic or Regen Certified all communicate your commitment to quality. If you’re selling any foods, especially meats, across state lines, there are even more rules and regulations. But they’re all meant to keep your customers safe from any food-borne illnesses and to showcase your commitment to excellence.
Increase Your ROI and Diversify Your Revenue Streams
Selling DTC is fun, challenging, and sometimes stressful. Nature doesn’t always give us the best year for bountiful crops. Some years we have drought, some years too much rain. When you diversify your revenue streams you’re creating a buffer for the vagaries of nature. Some crops will do poorly in a year, others will thrive.
When you identify your target customers and understand their wants and needs you can tailor your marketing efforts directly to them. You have to speak their language. Make your website user- and mobile-friendly with a message that resonates with your audience. If you’re selling online be sure you have secure payment options. And be sure you let prospective customers know how secure it is. Everyone’s being very careful these days. Let your customers know you appreciate their caution.
Growing a monocrop is, well…monotonous. But a diverse array of products? You may have a learning curve but the benefits are well worth the climb. Cutting out the retailer and putting on that hat yourself increases your ROI while protecting you from many unforeseen market forces. When you’ve got a quality product, and you market it with transparency you’ll grow your customer base even in tough economic times.
We all have to eat. And if Covid taught us anything, it’s to develop relationships with folks who produce food. And, as a food producer, it’s to your advantage to develop long-lasting relationships with local, regional, and national consumers who value good food.
At 3 Pillars Marketing, we’re committed to good food, lots of laughs, and an abiding relationship with nature. We think everyone should eat healthy and have access to nutritious food. We also believe the planet is our first priority, then people, and then profit. Because if the planet goes to “H**l in a handbasket” does profit really matter? If you also feel this way, we can help you find more of your people who also prioritize the planet. Contact us at [email protected] or visit our Priorities page to see how we value our planet. Discover your next move for impact and profit.