| SEPTEMBER 30, 2011 -- Many Connecticut farmers devastated by the recent storm are rethinking their business models to survive. Rather than shoulder the financial burden alone some farmers plan to adapt the Community-Supported Agriculture (CSA) model where a coop approach is used.
Connecticut farmers have lost millions in crops and many farms are still a mess from Hurricane Irene. Although some farmers may have crop and catastrophic insurance, many will not receive nearly enough money to compensate them for their losses.
These losses, they say, are forcing them to rethink how they sell their products, moving from a wholesale model to selling directly to consumers.
The state of Connecticut and the United States Department of Agriculture are still tallying up the losses from the storm. A sample of estimated losses as of September 16, according to the USDA’s Farm Service Agency; include the following (updated figures are expected to be released Friday, September 22):
Sweet Corn: 595 acres damaged, out of 2,020 acres of corn
Apples: 54 acres damaged, out of 994 acres of apples
Pumpkins: 180 acres damaged, out of 639 acres of pumpkins
Green Beans: 200 acres damaged, out of 388 acres of beans.
Waiting for Funds for Low-Interest Loans
Low-interest loans (3.75%) may be made available through the USDA’s Farm Service Agency (FSA). Gov. Dannel Malloy has asked the USDA for help with additional funds to provide for low-interest loans. In addition, the federal government offers crop insurance called the Noninsured Crop Disaster Assistance, but the most farmer can collect is $100,000 for their losses, says Marsha B. Jette, state executive director for the USDA’s FSA. “If farmers come into the office we can help them,” she says.
For this particular insurance, referred to as NAP, farmers pay a service fee averaging $250 per crop a year. This insurance, Jette says, can cover up to 70 percent of their losses.
“Insurances like ‘NAP’ are no help to us,” says Michelle Collins, retail manager, of Fair Weather Acres in Rocky Hill, Conn. Fair Weather is the largest wholesale of string beans in New England, producing approximately 2 million pounds of beans in a season. The farm also grows field tomatoes, cucumbers, peppers, squash, eggplant, pumpkins and vegetables.
Largest CT Bean Grower Doesn’t Qualify
To qualify for help under this particular insurance, Fair Weather would have to report a loss of at least 65 percent of their crop, Collins says. Fair Weather lost 60 percent and so this farm doesn’t qualify for assistance, she says. “It’s of no help. If we qualified we could get up to $100,000 back, but when you are talking about a $1 million loss and a farm loan due by December 31, it’s a drop in the bucket,” she explains.
The USDA decides which crops in which regions are eligible for the federal crop insurance program, making that decision on a crop-by-crop and county-by-county basis, says Sara Sciammacco, spokesperson for the Environmental Working Group, in Washington, D.C.
“Policies are available for more than 100 crops, but the problem is the program supports well known, well established commodity crops in areas where those crops have long been grown,” she says. “Four crops — corn, cotton, soybeans, and wheat — account for more than two-thirds of all the acres enrolled in the program.”
Moving to CSA Model
This enormous loss is forcing Michele and her husband Bill, whose family started the farm a few generations ago, to rethink their business model, she says. Rather than operate as a wholesaler, where Fair Weather sells its green beans to distributors – third party brokers – who sell to retailers, Fair Weather might adapt the CSA model, Michele says.
With a CSA model the famer has more control over price setting and can spread the risk among its members. Members buy into a CSA for a season and in return get fresh vegetables for many weeks. Holcomb Farm, for instance, one of the oldest and successful CSA farms in Connecticut, asks its 700 members to pay $630 for the year and in return members receive 20 weeks worth of fresh produce.
“We are looking at the CSA model so we don’t have to take out a farm loan at 18 percent and ask the consumer to take on some of the risk,” Michele says. The CSA model is a popular model in the New England and there are waiting lists to join Community-Supported Agriculture groups.
Insurance Is Expensive
In Connecticut and throughout New England there’s been an increase in the number of small farms, many of which grow specialty crops, says Henry Talmage, executive director of the Connecticut Farm Bureau. “The problem with specialty crop growers is that they won’t quality for federal insurance and getting insurance through private companies is very expensive. And so it’s hard to be made whole again when you have this type of disaster.”
Given the risks farmers are exposed to, including market and weather risks, Talmage says, he sees more and more farmers considering the CSA model. “There’s a trends of getting closer to the customer.”
The University of Connecticut has a risk management program to educate farmers about the risks. “In agriculture, it’s like rolling the dice,” Talmage says. “Getting closer to the consumer can help farmers offset the risk and improve margins.”
This season, however, farmers like the Collins will have to eat tremendous losses. The losses also stem from having to buy produce from other farms to keep their commitments to retailers and the community. For instance, Fair Weather lost thousands of pumpkins and is buying them from Long Island to make sure people who bought ticket to their Corn Maze fall festival will get their pumpkins that were included in the price of the ticket. “You don’t go into farming for the money, but you do it because you love it.”
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