Analysis of Risk Management Practices of Specialty Crop Producers in New York: Implications for Crop insurance
White, Gerald B.; Uva, Wen-fei L.; Cheng, Mei-luan
The last few years have been challenging for specialty crop producers as well as for all farmers. Trade agreements such as NAFTA, globalization, weather events (hail, drought, and wind storms), and low prices have impacted New York growers and stimulated new interest in tools to help cope with the risk that is inherent in agriculture. In 2002, specialty crop producers in New York State were surveyed about their risk management and cropping practices. This study is a partnership endeavor among the USDA Risk Management Agency, New York Agricultural Statistics Service, and the Department of Applied Economics and Management at Cornell University. We defined specialty crops as including fruit, vegetable, floriculture, nursery, maple syrup, Christmas tree, turf, aquaculture, honey, and mushroom enterprises. In addition to these specialty crops, the surveyed growers may also produce commodities such as milk, livestock, and field crops on their farms. New York specialty crop producers are among a select group being asked to provide input. Other states involved in this study are California, Florida, and Pennsylvania. Specialty crops are important to New York agriculture. Specialty crops according to our definition returned about $1 billion to New York farmers in 2001 and accounted for about 30 percent of total agricultural production value in the state. The value of New York vegetable production in 2001 totaled $481 million. New York grows a wide variety of vegetables for processing and fresh market uses. Cabbage, sweet corn, potatoes, onions and snap beans are the top five vegetable crops produced in New York and had a combined production value of $316 million in 2001. New York’s fruit crops were valued at $176 million in 2001. About 61 percent (or $107 million) was from apple crops, another 25 percent was from grape production ($45 million), and the rest was from other fruits such as cherries, pears, berries and stone fruits. The third most important specialty crop category in New York is greenhouse and nursery production, valued at $315 million in 2001. New York is an underserved state in terms of farmers’ use of crop insurance and other risk management products and tools, and growers of specialty crops in particular make less use of these tools than other farmers. The primary objective of the survey was to determine why Federal crop insurance and other risk management products are utilized at current levels by specialty crop producers in New York. A second objective was to determine how the design of crop insurance and other risk management tools could be improved to better meet the needs of special crop producers.
Charles H. Dyson School of Applied Economics and Management, Cornell University