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In the face of growing uncertainties in agricultural production, managing risk has become an essential component of farm sustainability. The Southern Risk Management Education Center (SRMEC) plays a pivotal role in assisting farmers and ranchers across the Southeastern United States by providing valuable resources and educational programs that empower producers to navigate risks in production, marketing, finance, legal, and human resources. With the center's support, farmers can develop strategies to mitigate the risks they face daily, enhancing their chances of long-term success.
This newsletter explores the impact of SRMEC’s efforts, discusses its key programs, and highlights ongoing initiatives aimed at helping producers manage agricultural risks.
What is SRMEC?
The Southern Risk Management Education Center (SRMEC) is part of the National Extension Risk Management Education program collaborating with three other regional centers. SRMEC is funded by USDA’s National Institute of Food and Agriculture and partners with USDA Risk Management Agency (RMA) to serve farmers and ranchers. The Center serves the southeast region of the U.S., including 13 states and two territories. Risk Management involves using strategies and tools designed to reduce the financial effects of the uncertainties of weather, yields, prices, government policies, global economies, human factors, and other conditions that can cause fluctuations in farm income. These strategies extend beyond federal crop insurance. SRMEC’s primary mission is to equip farmers and ranchers with the tools and knowledge necessary to manage agricultural risks effectively. The center provides grants and technical assistance, offering approximately $2 million annually to support educational projects designed to assist farmers.
Through SRMEC, farmers can access educational resources that address five broad areas of agricultural risk: production, marketing, finance, legal, and human resources. The center works collaboratively with land-grant universities, community-based organizations, and other agricultural institutions to deliver these vital services. SRMEC’s goal is to empower producers to understand and manage on-farm risks, helping them make informed decisions that improve the financial stability and longevity of their operations.
The Impact of SRMEC on Producers
Dr. Ron Rainey, Professor of Agricultural Economics at the University of Arkansas and Director of the SRMEC, explains that the center's programs reach a diverse group of producers, from beginning farmers to seasoned veterans who have farmed for decades.
In addition to offering competitive educational grants, the Center engages in risk enhancing capacity efforts. A recently launched program is the Crop Insurance Navigator program. Which provides technical assistance on federal crop insurance, helping farmers understand available products and their benefits. With a focus on small-scale producers, specialty crop, and livestock farmers, the SRMEC strives to increase awareness of programs like Whole Farm Revenue Protection (WFRP) and Pasture, Range, and Forage (PRF) insurance.
Estate planning and farm succession are critical areas where the SRMEC also provides assistance. With many farmers nearing retirement, the SRMEC helps producers develop legal plans to ensure smooth transitions of farm ownership to the next generation.
Beyond traditional risk management, SRMEC also focuses on helping farmers diversify their income streams. From agritourism to direct marketing, the center provides valuable advice on how farmers can adapt their business models to changing market demands and opportunities.
In the ever-evolving agricultural landscape, risk management is more crucial than ever. The SRMEC continues to make significant strides in supporting farmers through educational outreach, helping them understand and manage the various risks they face.
The Role of Risk Navigators: Building Trust and Empowering Farmers
Dr. Rainey highlighted the crucial role of SRMEC’s Risk Navigators. These professionals act as unbiased, intermediaries who help farmers understand complex crop insurance policies and risk management strategies. For many farmers, having a neutral third party to consult makes it easier to navigate the intricate world of agricultural crop insurance.
One key benefit of the program is the trust that develops between farmers and navigators. Dr. Rainey shared that over time, successful risk management stories have spread among farmers, with one farmer referring another to a navigator for assistance. Mutual trust allows farmers to make better-informed decisions, ultimately reducing their exposure to financial loss from unexpected risks.
Underscored that crop insurance isn't just a safety net—it’s an essential tool that can aid a farm’s financial stability and survival. He explained that crop insurance transfers risk from the farm's balance sheet to an insurance provider, allowing farmers to mitigate the impact of poor market conditions or unexpected weather events. There is a cost for federal crop insurance, but the returns and risk protection from the insurance products outweigh the costs.
For many, crop insurance offers peace of mind that their investments are protected, even if adverse conditions affect their crops.
A Real-World Example: Understanding the Difference Between Policies
Dr. Rainey shared a success story where a farmer discovered they were only covered under the USDA’s Non-Insured Crop Disaster Assistance Program (NAP), which provides limited coverage. After consulting with a Risk Navigator, the farmer learned about more comprehensive options, such as Whole Farm and Micro-Farm policies, which could offer better protection for their diverse crops.
"The key takeaway from this experience is that many farmers don’t fully understand the types of insurance available to them," said Rainey. "The low-cost option (NAP) may seem like a good deal, but it often doesn’t provide sufficient coverage in the event of a significant loss."
Key Programs and Initiatives
In 2017, the SRMEC introduced the Federal Crop Insurance Navigator Program to address a significant gap in the agricultural risk management landscape. The program trains a cohort of Risk Navigators, who serve as information brokers rather than insurance agents. Their role is to help farmers understand the complexities of federal crop insurance and dispel myths about its offerings.
The navigators educate producers on the different types of crop insurance, such as those offered by the Risk Management Agency, and guide them toward making informed decisions about which policies best suit their needs. The program also works to clarify the differences between crop insurance and other government assistance programs, such as the USDA’s Non-Insured Crop Disaster Assistance Program (NAP), which offers disaster relief at a much lower cost and coverage than traditional crop insurance.
Focus on Producers Who Underutilize Crop Insurance
Many farmers, particularly beginning farmers and those involved in niche markets such as specialty crops or livestock, may not be fully utilizing crop insurance due to a lack of awareness or access to information. The SRMEC’s programs specifically target underserved groups underutilizing crop insurance, ensuring they have the knowledge to take advantage of insurance products like Whole Farm Revenue Protection and Pasture, Range, and Forage insurance.
The center's initiatives have been particularly impactful for livestock producers who many who were previously unaware of the availability of PRF insurance. By training farmers on these options, the SRMEC is helping them build more resilient operations that can withstand the economic pressures of volatile markets and unpredictable weather.
SRMEC in Numbers
- $2.2 Million: Total investment in projects across the Southern region for 2023-2024.
- 32 Funded Projects: Focused on various risk management strategies.
- $776,240: Amount awarded to projects aimed at helping producers underserved by crop insurance.
These funds support projects that offer farmers and ranchers educational programs, outreach, and technical assistance, ensuring they are well-equipped to handle the risks they encounter. The funding provides resources for selected organizations to deliver workshops, training sessions and resources to help farmers successfully navigate their risky environments.
Conclusion
SRMEC delivers assistance across five core agricultural risk management areas. One of the primary concerns for farmers today is the ongoing financial stress caused by low profit margins. The SRMEC is focusing much of its efforts on helping producers understand and address financial challenges. In particular, the center is helping farmers navigate the intricacies of financial risk management, including strategies for reorganizing debt, seeking refinancing options, and accessing financial resources to support their operations.
The goal is to assist farmers in identifying tools and strategies that will help them remain financially viable, especially during periods of low profitability. The SRMEC’s educational initiatives equip producers with the knowledge needed to make critical decisions that safeguard their long-term financial stability.
Getting in Touch with SRMEC
For those interested in learning more about the SRMEC’s programs and resources visit the website listed below. You can connect with some of its aligned programs like the Risk Navigator program or Agricultural Agricultural Finance, Tax and Asset Protection.
- Website: srmec.uada.edu
- Email: rrainey@uada.edu
- Center Contact Office Number Contact Number: 877-866-1848
- Crop Insurance Navigator Hotline: 888-731-0888
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