Agriculture is a high-risk business. To help farmers wisely manage their risk, the University of California is initiating a broad-ranging risk management program that will reach a diverse group of farmers in California using a variety of tools for sharing information.

The program is funded by a $498,000 grant to the UC Agricultural Issues Center (AIC) from the USDA Risk Management Agency as part of the “Targeted Commodities Program.” The AIC will implement the program collaboratively with UC Cooperative Extension and other partners to help farmers identify risk and determine ways to manage that risk.

Agricultural risk comes in many forms. For example, during the growing season, prices can collapse, yields can be poor, labor can be unavailable or workers can be injured. To manage risk, farmers can buy insurance, grow a variety of crops, invest in mechanical harvesting equipment and make the farm a safer place to work. However, all efforts to manage risk have costs.

“Any business operation requires an effort to balance costs and benefits,” said Dan Sumner, AIC director. “We plan to present research-based tools to three groups of California farmers and ranchers to help them make informed decisions.”

The project team includes UC Cooperative Extension offices in Modoc, Lassen, Plumas, Sierra, Placer, Nevada, Lake, Fresno and Tulare counties, among others, and two key partners with the AIC: Center for Agricultural Business at California State University, Fresno, and Farm and Agriculture Collaborative Training Systems (FACTS), an agricultural training firm.

Work with counties

“We are working with county offices on this project to help fund their operations in response to the deep budget cuts they are facing due to the state fiscal crisis,” Sumner said. “We hope this funding will help offset some of their budgetary losses.”

Distinct audiences for the new initiative include:

  • Cow-calf and hay ranchers along the northeastern Sierra Nevada slope. Farmers and ranchers on the northeastern slope share the challenges of climate (this is the third year of drought), distance to market, meat packer consolidation and the changing American diet. An intensive 10-week risk management course will be held at three locations in this large region to help the ranchers meet these challenges. The courses, titled “Planning for Profit,” will be held in Alturas, Susanville and Reno from Nov. 4 to Jan. 22. Registrations are being taken by the Sierra College Small Business Development Center at (800) 527-7361. This program will be led by David Visher and Marcie Rosenzweig of FACTS.

  • Small and beginning farmers and ranchers. Many small and beginning farmers are concentrated on the urban fringe and often lack the scale and expertise to access traditional risk management tools and agriculture-specific business education. The project team will target this group by holding four to six workshops and offer articles about risk management to the news media in early 2004.

  • Fruit and tree nut producers in the Central and Coastal valleys. These are farm managers who raise trees on leased lands or their own. Their larger volume and short harvest season make some risk management tools unavailable. As part of this effort, the project team will conduct a four-week, Web-based risk management course supported by live workshops at California State University, Fresno, in 2004.

The USDA's Risk Management Agency (RMA) has offered competitive grants annually for risk management educational programs for historically underserved populations producing commodities that do not receive much government support. This year, the total awarded nationwide was $24.7 million.

“I've always been impressed with the work of the Ag Issues Center and I was glad to see them submit the proposal,” said USDA RMA Regional Director Bill Murphy. “They are taking a very interesting approach. One thing I like about the program is that it is geared at both large and small growers.”