Contact: Heather Gray
404 765 0991
hlgray@mindspring.com
www.federation.coop

In survey completed by the Federation of Southern Cooperatives/Land Assistance Fund a few years ago (2001) and funded by the USDA's Risk Management Agency, we have realized that many of the findings would likely be helpful to other farm groups and we will begin reporting on them periodically. In the project we wanted to assess the progress of Risk Management education and implementation of some risk management tools such as crop insurance.

ATLANTA....In this release we will  provide the findings on the differences between the purchasers of crop insurance and those who did not purchase the insurance. We will start each report with brief demographic summaries about the farmers who were interviewed.

Summary: In this survey 338 black farmers throughout the south were interviewed. Here are  some of the basic demographics of these black farmer respondents: 90% of the respondents were male; 31% of the respondents were under the age of 49 and 69% were from 50-93 yeas old. 46% had purchased crop insurance in the past 5 years; there was a fairly even distribution of the length time the respondents had farmed with the largest group (24%) having farmed 41 years or more; most of the farmers in the sample (56%) farmed 100 acres or less; most of the farmer (69%) owned from 1 to 100 acres of land; only 20% of the respondents reported receiving an FSA loan in the past 5 years; and 42% said that farming was their principle income.

There were relatively few surprises in the findings regarding farmers who had purchased crop insurance. Of the 338 respondents, 150 (46%) had purchased crop insurance in the past five years. In all of the risk areas, those who purchased crop insurance seemed to fare well.

A consideration of the general demographics revealed, importantly, that 56% of those purchasing crop insurance received some kind of risk management training compared to 35% of the non-purchasers. An impressive 91% said they were the major wage earner in their family compared to 85% who were non-purchasers. The majority of those who were purchasers said that farming was their principle income (91%) compared to 25% of those who had not purchased crop insurance the past five years.

It is well known that crop insurance offered to farmers tends to focus on the major commodities and this was also demonstrated in our findings. Farmers who had purchased crop insurance were, for one, engaged in a crop enterprise: 42% said they were engaged in a crop enterprise "only", 3% having a livestock "only" enterprise and 46% in a diverse crop and livestock enterprise. The crops grown by purchasers also tended to veer toward the major commodities such as soy (48%), corn (55%), peanuts (40%), and cotton (34%). In the "other"category, which was primarily vegetable producers, 30% of the purchasers were in this category. We anticipated this rather low percentage as many of the vegetable crops grown by small farmers are not covered under the Federal Crop Insurance Program.

By comparison, of the non-purchasers, 22% said they had a crop enterprise "only" and 31% both a crop and livestock enterprise. There were stark differences in the crops grown between the purchasers and non-purchasers. As expected 56% of the non-purchasers placed themselves in the "other" category of primarily vegetable producers.

Access to farm programs and credit are major factors for effective farm production. 38% of the crop insurance purchasers had obtained an FSA loan compared to 5% of the non-purchasers. In addition, of the entire sample only 20% of the respondents in the survey had received a loan from the Farm Service Agency (FSA) the past five years of which 86% had purchased crop insurance. This is not surprising as crop insurance is a requirement for most loans. The pattern of a stark difference between purchasers compared to non-purchasers accessing farm programs is replicated in other areas. For example, 65% of purchasers had participated in the commodity program compared to 7% of non-purchasers. Regarding disaster payments, 80% of purchasers had received these payments compared to 30% of non-purchasers.

On the whole, farmers who were participating in programs such as receiving an FSA loan, commodities, disaster payments, and the like, and those who consider farming as a principle income, were more likely to purchase crop insurance.

Go to the Federation's website at www.federation.coop for information about our programs.

Note: The Federation, now in its 37th year,  assists Black family farmers across the South with farm management, debt restructuring, alternative crop suggestions, marketing expertise and a whole range of services to ensure family farm survivability.