Agricultural technology has evolved from shovels and horse-drawn plows to digital and wireless solutions for just about every aspect of farm management. Industry pundits point out that, more than ever before, owners of smaller farms can access the same resources and products their larger counterparts utilize on a routine basis.
Among these are hundreds of computer programs - with a range of capabilities thats nothing short of astounding - and wireless systems, relatively cheap and easy to manipulate.
To be sure, some experts complain that farmers are taking their time getting to the keyboard, but there aresigns of progress. A recent report from the National Agricultural Statistics Service reveals that in 2005, 51 percent of U.S. farms had Internet access, up from 48 percent in 2003. About 58 percent had access to a computer in 2005, with no measurable increase from the prior survey. On the other hand, farms using computers to conduct business operations reached 31 percent in 2005, up 1 percent from 2003.
Budding Technology
The average small-farm operator may be a tad cautious about
using a computer to run the business, but software designers
are coming up with programs that calculate everything from
payroll taxes to feed formulations. The good news is, the
price tags on these marvels fall within even modest budgets
starting at under $200 for single-function products (such as
livestock recordkeeping for small herds) and ranging into the
thousands for complete packages.
The following entries describe just a few of the many types of software targeting agricultural businesses:
Herd management: Functions include breeding-stock production tracking; measures of individual bull and cow performance; animal health functions; reproductive performance and progeny listings; seed stock operation and feed formulation.
Crop management: Programs in this category monitor: harvest data; manure management; fertilizer and chemical application; crop varieties; planting cycles; tillage; and crop and field history. Some products offer visual crop drawing tools and additional graphic functions.
Irrigation management: This software coordinates irrigation tasks; monitors water usage, costs and efficiency; adjusts inventory levels and expenses; and tracks chemical and active ingredients applied to individual crops.
Business management: Many genres of agricultural software include business management functions customized to the particular crop or product, although separate programs are available. Capabilities should include financial, tax and banking components, as well as payroll, staffing, cost estimate and form/report/spreadsheet utilities.
Even if these possibilities have piqued your interest, a word of caution is in order. Choose only products that synchronize with your existing word processing and office-style products. Before one makes a final decision, they should browse a variety of Internet sites (many offer free demos) to ensure that theyre getting the biggest bang for their buck. While cheaper, less comprehensive programs may stint on support, the most useful (and more expensive) packages will offer, at minimum:
- Toll-free help lines
- Support sessions by appointment
- Price breaks on phone consults
- Tutorial/training components
- Interactive Web sites
- Minimally priced upgrades
- Reasonably priced subscription services
Finally - agriculturalists should not forget about freebies! The Internet likely is the single greatest source of tools, information and services available today - and the savvy farm owner can download plenty without spending a cent. Web sites like the United States Department of Agriculture (www.usda.gov/wps/portal/usdahome) host a bevy of free downloads, valuable links, and a wealth of technical, scientific and financial resources.
Look Ma, no wires!
Wireless technology, long a fixture across a score of
professions and trades, has slowly begun to change the way
farms do business. The literature lists dozens of uses for
this sort of equipment, among them: livestock identification
and tracking; monitoring chemical use and flood levels;
assessing crop conditions and meteorological data; tracking
shipments; operating Web cameras to safeguard property; and
reducing levels of theft, vandalism and other crimes.
Though the term wirelessembraces a broad spectrum of cutting-edge gadgetry, including old stand-bys like cell phones, television and radio, the personal digital assistant or PDA in particular is proving its worth in the field. Today's farmers are using these small computers, some as inexpensive as $200 or so, to facilitate operations and permit data entry from any location, as well to enable on-the-spot record keeping.
Experts say what makes PDAs so practical in agricultural applications is their capacity for synchronization.Simply put, these tools can upload, download and otherwise share information with desktop computers. This process instantly updates data changes on each apparatus, thus keeping all records and files in sync.
Through synchronization, the user also can create a backup of valuable information, especially critical during power outages or equipment failure. Whats more, expansion memory cards can greatly enhance data capacity.
Agriculture professionals in the market for a PDA should consider the following points:
- Data processing. If the owner plans to use a PC for most information entry and storage, then they should go for a PDA with a large screen rather than a keyboard, for increased visibility. This type allows the user to enter characters on a pop-up virtual keyboard.
- Word processing. For long reports and frequent document creation, desktop computers are the best bet - mainly because of their graphics capabilities and speed. By the same token, PDAs are terrific for mobile note taking, information gathering and record maintenance.
- Contact and schedule management. Having this brand of info at your fingertips is one of the PDAs prime perks, allowing the user to address crop changes and other concerns without leaving the field. Users should make sure the model they choose has the flexibility to assist with these tasks on all levels.
Sales & Marketing [top]
Folks in the agriculture industry share one common bond: the desire to grow. From the fields to their financial holdings, farmers strive to blossom the green stuff. According to the U.S. Department of Agriculture (USDA), the nation served as home to more than 2.1 million farms at last check. As these operations plow through the challenges of an expanding global market, more industry professionals find themselves digging for sales solutions. Fortunately, a number of nonprofit organizations and government-backed programs offer marketing guidance to keep agriculturalists feet firmly planted in the ground. The following provides a mere glimpse of such available resources:
- Market Access Program (MAP)
The USDAs Commodity Credit Corporation provides money to help the nations producers, exporters, private companies, and various trade organizations pay for promotional activities for U.S. agricultural products. The program finances several areas, including consumer promotions, market research, technical assistance, and trade servicing. Professionals in the agriculture industry can submit a MAP proposal at AG Box 1042, USDA (1400 Independence Ave.), Washington DC 20250-1042.
- Foreign Market Development Program (FMD)
Likewise, the USDA Commodity Credit Corporation also funds the FMD. Commonly called the Cooperator Program, this resource gives money to campaigns that create, expand and maintain future export markets. In order for the program to work, the USDA formed a trade promotion partnership with a number of agricultural associations dubbed Cooperators. Together, they team up to put their technical and financial resources toward marketing U.S.-raised products overseas. In turn, the FMD helps folks in the farming community move in on untapped foreign markets while boosting share in those that already exist. Before being approved for the program, however, those interested must submit a strategy outlining a viable, long-term plan for economic growth. Once approved, participants must keep an itemized list of expenses incurred during the program year and submit them to USDA for reimbursement, the government agency notes.
Quality Samples Program (QSP)
Each year, the Commodity Credit Corporation puts roughly $1
million or more toward the QSP. This effort lets agricultural
trade organizations provide samples of products to importers
in up-and-coming overseas markets. Designed to rouse foreign
demand, the QSP helps farmers showcase the quality of U.S.
goods to prospective foreign consumers. According to the
USDA, the program also lets overseas manufacturers conduct
product test runs, ultimately determining how U.S.
commodities might meet their production needs.
For those interested in using the program, the USDA annually sets up an application period then publishes the dates in the Federal Register. According to the USDA, once a submittal receives funding approval, the applicant must obtain commodity samples, export them and provide the importer with the necessary technical assistance to use the sample. When a particular project reaches its conclusion, the government agency reimburses the participant for the costs of procuring and exporting. In the past, the Commodity Credit Corporation gave priority to efforts focused on regions with a per capita income of less than $9,360, and a population greater than one million. The government agency also favors projects designed to increase exports in areas where the U.S. commodity market share totals 10 percent or less.
Gone to the Farm
In today's competitive agricultural industry, many farmers
harvest the fruits of their labor through agritourism. As
more vacationers seek value-added, educational activities for
the entire family, the idea of heading to the country for
solitude continues to grow in appeal. Aiming to cash in on
the trend, certain farms now market their products by
inviting the public for tours, meals and more. Since most
agritourism functions require only a handful of workers to
perform, the concept presents the perfect solution for small
operations looking for added sales. Uses often range from
elaborate bed and breakfasts, youth camps, rental cabins and
wedding reception hubs to horse riding trails, corn mazes,
biking paths and more. A number farms involved in agritourism
prefer to keep it simple, letting visitors just come to hand
pick their own seasonal produce. Other operations actually
provide tours of the land and facilities, educating the
audience about the daily tasks. Weekly demonstrations like
how to produce cheese - and routine festivals often keep
customers coming back and put the business on the map.
Nonetheless, a city or county might require certain zoning
regulations for agritourism. Those wanting to establish such
operations should contact their local government or Extension
representative before further pursuing the business.
For those who prefer focusing on crop yields rather than entertaining, regional farmers markets also provide a great outlet for driving up sales. Usually for a minimal fee, these events allow area agriculturalists to display and sell their fresh goods. Farmers markets tend to draw not only locals, but tourists as well. They allow the public to put a face with the name and help build community presence: In short, branding.
Customer Service [top]
In an ideal world, American farmers grow top-notch fruit, vegetables and grains, or raise the finest live stock without a hitch - feeding millions and reaping hefty annual profits as a by-product. But this is reality. Today's smaller-farm owners are scrambling for ways to serve their customers without drowning in the teeming waters of competing businesses and fiscal concerns.
While no simple solution to the dilemma has surfaced so far, a growing number of individuals are exploring options beyond the boundaries of the agricultural establishment. Among these, organic, nicheand custom farming methodologies seem to be leading the way in satisfying consumer demands and, just maybe, keeping some farms in business.
Organics find a Niche
Though organic farming fills a niche, not all niche farming
is organic. In a nutshell, niche farmingis defined as
the production of crops (or livestock, for that matter) for a
specialized market. Some examples are rare herbs, heirloom
tomatoes and exotic fruits and vegetables. In turn,
organic farming falls into a niche, because the
aim is to produce wholesome foods using integrated
agricultural systems that are both environmentally and
economically sustainable.
Key organic-farming objectives include protecting long term soil fertility;using nutrient sources made accessible to plants through soil microorganisms activity; effective recycling of usable organic materials; pest, weed and disease control via crop rotation and natural processes; and intensive livestock management, with an emphasis on nutrition, housing, health and breeding.
That said, research indicates that the public demand for organic food is on the upswing, and not simply because of the American consumers worry over chemical feeds and fertilizers - though this clearly is one catalyst.
According to a recent USDA study, factors such as concerns for the environment; health and nutrition benefits; and flavor quality also are driving the market. In fact, the same report predicts that penetration in the U.S. food market for organic products will reach 3.5 percent by 2010. In 2003, the rate stood at only 1.8 percent.
Keep in mind, though, going organic is more than just a matter of tossing out chemicals and opting for all-natural cultivation and conservation practices. A network of government and international guidelines has been woven over the years, most recently the USDA National Organic Standards, in 2002. As such, the Federal system continues to certify growers and handlers of organic products, as it has for some time, but every certifier now must earn USDA accreditation.
Farming Custom vs. Custom Farming
Owners of large commercial, small traditional or organic
farming businesses are finding that collaboration can meet
the consumer demands of the market, and cut down on overhead
to boot.
Custom farming is an arrangement wherein the custom farmer performs all machine operations on the owners land in exchange for a predetermined fee. The landowner then covers the cost of seeds, chemicals and other materials, but in turn, keeps the entire harvest. Sometimes, custom work entails a labor exchange between two separate owners whose resources complement each other. Its also not unusual for a landowner to turn over entire management responsibility to a custom farmer on either an annual or a job basis.
Experts maintain that all parties gain from these models. The custom farmer need worry only about fuel and equipment maintenance, while earning a fixed return. And owners, particular those with small farms, can focus on production and getting the goods to market - and to consumers tables without taking on major machinery costs. A report issued by the University of Iowa offers solid advice for operators and owners involved in customer farming. The document recommends the following tips:
- Make sure you have time for more work, or to cultivate additional acreage. This means considering planting and tillage cycles.
- Research the market. Dont forget to check with professional farm managers who work for larger businesses. They may need a reliable operator.
- Conduct a cost analysis. Both owners and operators should consult with the pros. Small business development centers typically offer financial, operational and management advice for free.
- Network. Let others know, by word of mouth, that youre looking for work, or that youre seeking a partner. Use local newspapers, flyers and the Internet to advertise your services or needs.
- Make the deal. Work up a written contract between custom farmer and landowner; obtain all necessary certifications, and establish a proper business entity (such as LLC). Most important, dont forget to obtain adequate liability/insurance coverage.
Staffing & Employment [top]
What type of agriculture business do you have or want? – Live Stock? Wine? Eggs? Organic Fruits & Vegetables? There are so many choices in this field – biotech, farmers market, firewood, greenhouse plants, fish farming, hydroponics, ornamental cactus, and even lady bugs farming (not to mention “worms”). The point in listing this plethora of possibilities is that each of these business opportunities/markets has its own personality which will begin to define the numbers of and types of people resources you will need to make a go of a specialty agricultural small business. As an aside, because food is so important to us all (and so “health” sensitive), there are many laws and regulations that are ever changing, so you will want to make sure that you are plugged into a good information source that will keep you current. Also, there is lots of help from the US government as well as the SBA for this genre of small businesses, including grants, loans and technical assistance.
In all likelihood, if you have chosen an agricultural specialty/niche for your small business, you have personally become the subject matter expert in the technology and techniques required of your new small business. So, as you add staff to your enterprise, you will be the teacher and quality control/subject matter expert. And, unless your business is on the cutting edge of agricultural technology development, it is highly likely that you will need people working for you on the “production” side of your business. The things to look for in filling these human asset needs are: ability to learn quickly, reliability/dependability (on-time and not absent), ability to do some manual work as well as the “paperwork” that provides the information and records you need to comply with all of the laws and regulations. If your business involves farm animals (or insects), you will probably want someone with a background that has included exposure to these types of “critters or bugs”.
If you are NOT the subject matter expert, and are instead the financier, accountant, marketer, grant writer, etc., then you will have to recruit or develop someone with the technical expertise your chosen business requires. There are many colleges/universities that specialize in agricultural endeavors which will probably have the talent, knowledge and skill sets your business will need. A quick internet search on “Colleges & Universities near ‘____’ (fill-in the geography or zip code) specializing in Agriculture” will give you a great starter list and each institution’s website will regal you with the latest cutting edge training being provided to students in unique, new areas. If you are acquiring someone else’s small business because they are retiring or getting out, it is very common to include as part of the sale/purchase negotiations for the business, an assurance of technical knowledge and help for a defined time period thus allowing you to continue to operate the business while you find the new technical expert you will need. Also, industry publications like the “Farm Journal” are excellent sources of information, contacts, and industry trends and resources.
Depending on your business, you may have seasonality needs for different staffing levels (i.e., planting or harvesting), so you will also need to develop a reliable supply of “seasonal” and/or part-time workers. College students (over 18 to avoid dealing with the child labor laws) are a good source of such help. If you are thinking about using “migrant/seasonal workers” to fulfill this need, please know that there are specific laws concerning how such workers are treated/paid/hours worked/overtime calculations, etc. Information on this topic may be found in a variety of places—i.e., Employment Law Guide - Migrant and Seasonal Agricultural Worker Protection. Also, if your business requires specialty activities like the application of pesticides, herbicides and/or fertilizers, etc. many local community college and trade organizations offer one-time classes on how to do these tasks safely and effectively.
To meet your employment needs, particularly in today’s environment, it is probably best to minimize the number of full-time “employees” on your payroll. Not only do you have a number of tax obligations (social security, Medicare, unemployment, etc.), but legislation requiring paid benefits continues to place the burden of things like medical insurance, paid days off for sick leave, paid holidays, etc., squarely on the backs even small business employers. Part-time and seasonal workers are a smart way to go.
How do you find the talent you need? This introduction has given you several suggestions. If you need more ideas, please refer to the Human Resource for suggestions. This information provides ideas on where and how to recruit the talent you need.
With today’s social media, using your private list of key contacts by simply letting them know you have a specific need for an employee or consultant/part-time/project specific person will probably satisfy your talent needs faster than you can imagine. If you use your search engine to query “employment agencies near {zip code}” not only will you get names of a variety of hiring agencies (aka “headhunters”) who can relatively quickly provide you with suitable candidates (either “permanent” or temporary) at a reasonable cost, but you will also see a number of boards on which you may post your “opening” at virtually no cost. If you use this tool, be prepared for an avalanche of candidates—the point being, be selective.
Billing & Accounts Receivable [top]
The agriculture industry holds a preeminent position in America's cultural hierarchy, mainly because the fundamental act of feeding people ultimately nourishes and sustains all economic, scientific and artistic achievement. That said, the fact remains that today's farmers - especially those running smaller independent businesses - struggle to keep cash flow steady. With income largely resting on seasonal cycles, erratic postings to the accounts receivable column are a pretty routine challenge.
Even so, a number of professionals say cleaning up billing and collection systems, as well as paying close attention to cash flow patterns, can go a long way to keeping an agricultural operation in business.
Bill for balanced budgets
The latest statistics from the United States Department of
Agriculture reveal that about
2,089,790 farms nationwide were doing business in 2006, down
from 2,098,690 the prior year. While many complex factors
have contributed to this downward trend, logic dictates that
some farms failed simply because accounts receivable never
saw payment of monies owed.
On the upside, experts point out that systematic collection procedures can help owners of smaller operations move toward solvency. Here are just a few basic tactics that can yield positive results.
- Prepare a contract. Many industry pundits maintain that putting payment, service and delivery terms into a formal agreement, signed by farm owner and customer, greatly reduces the potential for confusion later on. Specifically, when a due date passes with no check in sight, a contract makes it easier for the business owner to press for payment (a late fee - 5 percent, for instance, can be part of the deal). And though it's sometimes more comfortable to let matters slide - especially with loyal customers - sticking to the provisos as written is the only way to get money to the bank.
- Invoice precisely. Research indicates that a whopping 80 percent of collection problems stem from incorrect or incomplete invoice forms. Errors range from incorrect addresses and/or recipients, to insufficient explanation of terms and unclear payment date information. To sidestep these pitfalls, it's a good idea to use bill-generation software, which provides templates that do 99 percent of the work. At the very least, a reliable word-processing program goes a long way to making invoices legible and easy to replicate.
- Tighten billing cycles. When stunted cash flow persists, shortening the payment-due period can get the money stream moving again. Rather than operating on a 30- or 60-day cycle, for example, ask for checks within two or three weeks of the billing date. A business owner has the privilege of setting his own conditions, after all.
- Repeat the message. Whether a customer is brand new or has been around for 10 years, all invoices should include a full statement of account activity, with order number, shipping date(s) and past-due, as well as current amounts. Listing these details every billing period makes it easier for customers to meet obligations in a timely fashion.
- Keep meticulous records. Every piece of information that goes to customers in invoices should have its duplicate in the business's records. By the same token, all payments should be posted to accounts receivable immediately, with routine verification of balances. In smaller operations - particularly where farmers do their own bookkeeping - the easiest way to track financial matters is on a continuous basis. Consistent, ongoing maintenance prevents errors that can stall the billing-payment cycle.
Cues on cash flow
Money flows into and out of every farm operation, regardless
of size. In an ideal word, the activity is steady. In
reality, though, agricultural revenues typically seesaw,
balancing only when money is available to pay bills, buy
equipment or meet payroll. While a solid customer invoicing
system helps, most industry analysts concur devising a budget
is a key strategy in managing cash flow.
While the thought of looking into the murky future can provoke anxiety, budget planning allows the farm operator to know when money tends to come in, and when it goes away.
Categorizing monthly expenses and receipts from the previous year lays the foundation for projecting into the next 12 months. Items might include feed/chemical costs, equipment rental fees, payroll and any other outlay inherent in running the business.
When estimating for the upcoming year, it's critical to allow for expected increases in costs, as well as for anticipated changes in income.
Monthly budget updates and adjustments should occur as "real" expenses and receipts are posted. This provides the farm owner with an emerging record of cash flow patterns, including potential shortfalls - thus allowing him to come up with an action plan. In addition, an itemized record of this financial activity provides excellent documentation when applying for loans or grants.
Vendor Relations & Purchasing [top]
Judging by the strong online presence of feed and farming equipment stores, today's growers don't mind leaving the field from time to time to do a little bargain hunting on the Internet. In an industry where so many rely on their hands to tackle the daily workload, a few taps of a keyboard seems almost minuscule in comparison - a well-deserved break so to speak. Still, a growing number of agriculturalists depend on their computers to keep relations strong between them and their vendors. In turn, suppliers continue to experience first hand the usefulness of a Web site when it comes to harvesting a new cash crop of customers.
Vendors aim to strengthen customer relations with
value-added perks
It would appear the days of walking into the local hardware
shop, purchasing a few bags of feed and chatting with the
fellow behind the counter are all but over. In so many cases,
the purchasing process now boils down to a simple formula:
quick and easy plus efficient equals better sales.
In order to meet customer expectations for quality and expediency, many vendors currently offer Web sites that provide shopping cart features. This function allows farmers to register for an account and place orders on the fly. Essentially, the customer's credit information and purchasing history is stored in the vendor's database, making transactions as easy as clicking a few buttons. Usually, the more a client buys online, the more the vendor rewards them with discounts and digital coupons.
Since most farmers order in bulk and must figure out exactly how much to buy based on acreage, animal size, weight, etc., some vendors do their best to make Web purchasing as pain free as possible by taking math out of the process.
For instance, tools like feed and supply calculators are becoming a popular facet of the online shopping scene Animal weight charts/formulas add a whole different level of convenience to buying products. This feature lets farmers determine the appropriate weight/size of livestock based on age. As a result, agriculturalists can gage whether they're over purchasing food supplies and cut back on waste.
In other cases, suppliers provide tools for anticipating how much raw materials to order. A good example of this trend is online fencing calculators. These tools let agriculturalists determine how many rolls of fence and the number of posts to buy based on the land's dimensions.
Aside from calculation services, a good number of vendors also offer other free, online functions designed to help farmers. Tools like animal medication guides, advice on beef heard health, horse nutrition guides, deworming tips, livestock injection strategies, and guidelines for monitoring animal vitals represent only a few of the beneficial resources sprouting up on certain vendor's Web pages.
Vendor dependability is a must
The pulse of any farm beats to the capabilities of its
machinery. If one piece of equipment breaks, the entire
operation tends to suffer major setbacks. In other words,
broken-down tools often deliver a damaging blow to the
financial heart of agricultural businesses.
When seeking a vendor to buy equipment, farmers should ensure the supplier offers an extensive warranty package. In addition, clients should research the vendor's procedure for handling non-operating equipment. Does the vendor offer on-site repair? Will the equipment need to be shipped?
In response to minor cases, large-scale suppliers usually designate sections of their Web sites for copies of equipment manuals. Sometimes, it simply takes a bit of written advice to resolve equipment failure. However, if the customer's problem requires the company's assistance to fix, certain vendors allow clients to schedule appointments online through their Web site. Popular among vendors with a number of locations, this feature actually works in favor of the farmer. By scheduling online, there is no need to waste time on the phone dealing with customer support. Moreover, it reduces the chance for errors in the date, time and location of the appointment.
If purchasing a product from a nationwide dealer over the Internet, the buyer should always check to see if the business has locations nearby. This could prove vital if a key piece of machinery breaks during the height of harvest season. Turn-around time is everything and keeping vendors close to home is just a smart practice altogether.
Agriculture Insurance [top]
By Marita Bon
The American agriculture industry may have spawned some mega-farms, but small and family-owned operations still comprise the lion's share of the market - about 90 percent, according to U.S. Census statistics. With so much product and property to protect, insurance experts stress the importance of adequate coverage. This applies not simply to land, buildings and crops, but to owners and employees as well.
The criteria for choosing certain policies fluctuate widely from business to business, as do the premium costs. For this reason, consulting a licensed agent or broker with solid experience in farm coverage is a good idea - and so is doing some homework before sitting down to talk. Start by reviewing the list below, which describes key insurance products "agri-preneurs" would do well to investigate!
Agricultural (Farm) Insurance
While coverage under general agricultural insurance policies varies among providers, the following products usually come with the package:
- Property and casualty insurance (P&C) protects physical property such as farmhouses, outbuildings, equipment and household belongings against certain causes of loss or damage, among them fire, lightning, hail and tornados. P&C also provides coverage against losses due to theft and vandalism, as well as liability protection, in some cases.
- Liability insurance provides coverage when an employer unintentionally causes an employee or other individual injury, or if that person's property is damaged or destroyed.
- Medical payments coverage reimburses up to a certain amount for medical expenses incurred by individuals hurt or incapacitated on a farm owner's property. In some cases, protection can extend off-site, although this provision does not apply to the policy holder and members of his household.
- Additional living expenses coverage pays for costs incurred when the insured and members of his household must live elsewhere because the primary dwelling has sustained covered damage. For instance, the insurance provider will pay motel or apartment rental fees while a lightning-struck home is under repair, or when fire has rendered a structure uninhabitable.
Crop and Livestock Insurance
The United State Department of Agriculture Risk Management Agency subsidizes insurance coverage for more than 100 crops. In recent years, regulations have expanded to include livestock as well. Here is a rundown of available products.
-
Yield-based insurance coverage includes:
Actual Production History (APH). These policies insure against losses due to natural causes such as hail, drought, extreme moisture, wind, frost, disease and insects. Farmers choose the amount of average yield (usually 50 to 75 percent) to be covered, as well as the percentage of predicted price (55 to 100 percent of annual RMA-estimated crop price). When the harvest runs less than the yield insured, the farmer receives an indemnity calculated on the difference.
Group Risk Plan (GRP). A county index provides the basis for determining loss in this policy category, rather than an individual farm's loss records; so a farmer receives an indemnity when his harvest falls below his selected trigger level. While GRP coverage requires less paper work and is cheaper than APH, it works best for owners whose losses usually follow their respective county's pattern.
Dollar Plan. The amount of insurance rides on the cost of growing a crop in a specific location, with the insurance's maximum dollar amount stated on the actuarial document.
-
Revenue insurance plans include:
Adjusted Gross Revenue. AGR policies insure a farm's entire revenue instead of an individual crop's by guaranteeing a percentage of the average gross, including a small portion of livestock income.
Crop Revenue Coverage. CRC offers protection based on price and yield expectations, paying an indemnity when actual gross revenue falls below a revenue guarantee.
Group Risk Income Protection. GRIP pays an indemnity only when the average county revenue for the insured crop falls below the farm owner's chosen revenue amount.
Income Protection. IP protects farmers against decreases in gross income when a crop's price or yield is less than early-season projections.
Revenue Assurance. RA provides coverage based on the farmer's selected dollar amount of target revenue.
-
Livestock insurance includes:
Livestock Gross Margin. LGM offers protection against the loss of gross margin, which is calculated by subtracting feed costs from the livestock's market value. Animals covered under this policy include cattle and swine, with eligibility limited to certain states.
Livestock Risk Protection. LRP polices insure against falling prices on the market, thus protecting farmers for the insured period. Livestock specified in this coverage are swine, lamb, feeder cattle and fed cattle.
Catastrophic Coverage. CAT pays 55 percent of a crop's established price on crop losses exceeding 50 percent. While the federal government covers premiums, farmers must pay a $100 administrative fee for each crop insured in each county, with some exceptions for destitute owners. Not every policy offers CAT coverage.
Additional Insurance
Even when property, personnel, revenue and products fit snugly under a policy blanket, farm owners need to consider other areas that need protection. Here are a few additional product categories worth investigating.
- Commercial Automotive Insurance. Standard auto insurance policies or general farm insurance may not provide sufficiently for business-owned vehicles. In addition to liability and physical damage coverage, which includes collision, comprehensive and specified perils, industry analysts recommend personal injury protection, as well as coverage for uninsured motorists.
- Business Equipment Insurance. Farmers dependent on leased equipment should make certain that existing insurance policies offer full replacement coverage for losses. If not, a separate plan may be in order.
- Workers Compensation. Mandated in most states, these policies provide economic relief to farm workers injured on the job, including monetary allotments for medical treatment and compensation for lost time.
- Key Man Insurance. Particularly suited to a small-farm venue, this insurance policy on the owner's (or other key administrator's) life provides revenue and time for survivors to devise a plan to preserve the business, in the event of his death. Because the farm is the beneficiary, the business pays policy premiums.
- Health Insurance. A subject that causes considerable worry among self-employed individuals, it's important to note that group plans, which require two or more employees for a business to qualify, do make premiums easier to manage. Also, many insurance providers are striving to make health insurance generally more affordable for small companies.
Agriculture Communication [top]
By Marita Bon
Owners of small to mid-size farms once spent their days balancing office and field chores, struggling not simply to gather critical management information, but to get it onto paper. True, the emergence of desktop computers a couple decades back made data entry a lot easier. But transferring crop, livestock, weather and other vital information gathered on the job to office files still stretched the work day long beyond sunset - that is, until mobile communication devices hit the market.
These days, farm owners can map acreage, update electronic crop records, phone vendors, and e-mail revenue projections to their accountants - all while standing in the beet field. In fact, industry pundits say that PDAs, Smartphones and new software specifically targeting agricultural enterprises have real potential to boost profits, reduce duplication, enhance business reporting and monitoring, document transactions and pretty much streamline any business-related function.
In a perfect world, even technologically inexperienced farm owners could pick up their handhelds and go. But this is not the case, so entrepreneurs taking their first steps into cyber-agriculture would be wise to seek help. County extension service offices and local community colleges are terrific go-to resources for this type of information.
In the meantime, the following sections offer a summary of leading portable communication devices and related software - all capable of synchronization with office computer systems. Prices vary widely and ranges are noted, when available:
Portable Communication Devices
-
Personal Digital Assistant. At its most
rudimentary aPDA is a handheld computer
that manages contact lists, tasks and calendars, with the
capability to synchronize data with other computers via
cable or wireless connections. Wireless PCS also may
feature e-mail; Internet browsers and cell phone service
(see Smartphone). Prices, on average, start
at less than $100, ranging up to more than $400.
"Rugged" models, specifically engineered for industrial or outside use, offer amenities such as heavy-duty casing (e.g. magnesium), water-proofing, extra-long battery life, lock-in cradles and "explosive atmosphere" tolerance. Of course, these gadgets get quite pricey, costing around $1,000 at the low end, up to $4,000-plus.
-
Smartphone. This appliance is a cell phone
with information access, offering various combinations of
touch screen, e-mail, pager, text MP3, television and
video player. Once prohibitively expensive, today's
models range from $100 to $800. Like PDAs, they can
accommodate hundreds of agricultural software
applications, with the added perk of digital voice
service.
Though the development of "rugged" Smartphones remains in the early stages, one leading manufacturer recently introduced a model that withstands drops and rough handling, with buttons tolerating 500,000 pushes. The price runs under $1,000.
Software
- Wireless data transfer allows automatic transfer of information from field to home office without memory cards or cables, thus reducing record-keeping chores. Working with any mobile device with WIFI capabilities, these programs provide a listing function for fields, personnel, supplies and more. While prices differ among vendors, good packages are available for $200 to $300.
- GPS software operates from signals generated by the Global Positioning System, a network of 24 orbiting satellites which make it possible for ground receivers to pinpoint geographic location. As agricultural applications go, these programs allow farmers to create maps of field boundaries and tile lines, as well as spray paths, untilled areas, tile lines and other land features. Most brands work with any wireless PDA or Smartphone equipped with a GPS utility. Prices hover in the $225 to $300 ballpark.
-
Farm-management software does just that. In
fact, the range of administrative/operational tasks
possible with handheld devices is staggering. Here is
just a sampling of what vegetable farmers can input and
manipulate: spray and water diaries; employee timesheets;
crop inputs and production costs; harvest plans;
inventory and production scheduling. Owners likewise can
track supply usage, equipment hours, weather, field
conditions and yield data.
By the same token, ranchers and livestock producers can use herd-management software on both PDAs and Smartphones to performance-record cattle, sheep, horses and other stock, along with details on individual animals, such as sires, dams, breed types and color. Charting specific data - from field or pen - on health, mating, transfer, wean, service, animal loss and feed records likewise is very doable with this software.
Prices for these farm/herd management programs can run as high as $900 per package, but lease/subscription plans make matters more affordable on an annual basis. What's more, many leading vendors provide online support and updates, either free or for a nominal annual fee.
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