Source: USDA/ERS submitted to
RISK MANAGEMENT FOR ORGANIC PRODUCTION
Sponsoring Institution
Economic Research Service/USDA
Project Status
TERMINATED
Funding Source
Reporting Frequency
Annual
Accession No.
0406424
Grant No.
(N/A)
Project No.
PMT24
Proposal No.
(N/A)
Multistate No.
(N/A)
Program Code
(N/A)
Project Start Date
Jun 15, 2002
Project End Date
Sep 30, 2004
Grant Year
(N/A)
Project Director
Greene, C.
Recipient Organization
USDA/ERS
1800 M STREET NW
WASHINGTON,DC 20036
Performing Department
ECONOMIC RESEARCH SERVICE
Non Technical Summary
This project will provide basic research that will assist RMA develop organic risk management products.
Animal Health Component
(N/A)
Research Effort Categories
Basic
(N/A)
Applied
100%
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
60552203010100%
Knowledge Area
605 - Natural Resource and Environmental Economics;

Subject Of Investigation
5220 - Pesticides;

Field Of Science
3010 - Economics;
Goals / Objectives
The Agricultural Risk Protection Act of 2000 explicitly includes "scientifically sound sustainable and organic farming practices" as "good farming practices" for insurance purposes. RMA intends to propose Basic Provisions of Insurance that modify the definition of "good farming practices" to include organic farming practices. However, specific information is not readily available about risks associated with organic farming, the current extent of organic production, prices received for organic produce and risk management strategies employed by organic producers. This project will provide basic research that will assist RMA develop organic risk management products.
Project Methods
Data will be collected from focus groups. Six focus groups representing different segments of the organic industry will be set up.

Progress 06/15/02 to 09/30/04

Outputs
Project was completed by submission of a report to Risk Management Agency and publication of article in Renewable Agriculture and Food Systems. The University of Maryland cooperative agreement with the Resource Economics Division in ERS for collaborative research on this project was also completed. Focus-group participants, particularly grain, soybean and cotton farmers, saw contamination of organic production from genetically modified organisms as a major risk. Focus-group participants producing grains and cottonamany of whom knew about and had obtained crop insurancearaised concerns about coverage offered, including the need for insurance to reflect the higher prices received for organic crops. Most fruit and vegetable producers participating in the focus groups had little knowledge of crop insurance. When provided with basic information about crop insurance, operators of small fruit and vegetable farms were skeptical about its usefulness for their type of operation.

Impacts
Information on organic producers views of risk and risk management was provided to Risk Management through a report and briefing. Project findings were also disseminated through a journal article in Renewable Agriculture and Food Systems and will be presented at the AAEA 2005 annual meetings.

Publications

  • Dismukes, R., Chambers, W., Greene, C., James Hanson and Amy Kremen, "Risk Management in Organic Farming", Final report to USDA Risk Management Agency, April 10, 2003.


Progress 10/01/02 to 09/30/03

Outputs
In 2003, ERS and University of Maryland submitted a joint final report to USDA's Risk Management Agency on the size and characteristics of the U.S. organic farm sector, including an exploration of risk management views and issues in the organic sector. The ERS/University of Maryland team conducted six focus groups with organic farmers with various commodity specialties in different regions of the U.S. during 2002. Focus group participants producing grains and cottonamany of whom knew about and had obtained crop insurancearaised concerns about coverage offered, including the need for insurance to reflect the higher prices received for organic crops. Most fruit and vegetable producers participating in the focus groups had little knowledge of crop insurance. When provided with basic information about crop insurance, operators of small fruit and vegetable farms were skeptical about its usefulness for their type of operation.

Impacts
The Agricultural Risk Protection Act of 2000 recognizes organic farming as a "good farming practice" that is covered by federal crop insurance. USDA's Risk Managment Agency used results from the final project report, "Risk Management in Organic Farming," as supporting information in developing risk management tools that are useful for the organic farm sector.

Publications

  • Dismukes, R., Chambers, W., Greene, C., James Hanson and Amy Kremen, "Risk Management in Organic Farming", Final report to USDA Risk Management Agency, April 10, 2003.