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 of responses by the purchasers and non-purchasers of crop insurance to questions on financial risks.

              The findings on financial risks of farmers in our sample revealed some surprises and some predictable results. Farmers who purchased crop insurance appeared to be more engaged in financial record keeping when compared to non-purchasers. For example, 75% of farmers prepared an annual balance sheet compared to 39% of non-purchasers; 72% prepared annual cash flow statements compared to 36% of non-purchasers; and 69% of purchasers prepared an annual  income statement compared to 43% of non-purchasers.

              Surprisingly, the non-purchasers of crop insurance tend to feel more comfort with their debt level and have savings.  Not surprisingly, 31% of purchasers were investing in non-farm enterprises compared to 57% of the non-purchasers. If crop insurance  purchasers are more engaged in agriculture then their investments reflect this. This would also apply to off-farm income - 58% of purchasers had off farm income compared to 84% of the non-purchasers. Some surprising results, however, were in the realm of savings, reserves and debt issues: 43% of purchasers said they had savings compared to 55% of non-purchasers; 18% of purchasers said they had financial reserves compared to 41% of non-purchasers; and 43% of the purchasers said they were comfortable with their debt compared to 64% of non-purchasers. If purchasers are more involved and invested in agriculture then perhaps their resources become constrained and a feeling of comfort with debt might be adversely affected. Interestingly, 85% of the purchasers and 87% of the non-purchasers said they were managing their debt even in spite of their comfort level.

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.

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.