The AGR-Lite Wizard: Case Study of the Value of Interactive Software

Tools for Farmer and Ranchers

Jeff Schahczenski, Agricultural Economist National Center for Appropriate Technology

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Sustainability-Resilient Diversity

“In every deliberation, we must consider the impact on the seventh generation... even if it requires having skin as thick as the bark of a pine.” —Great Law of the Iroquois”

– Resiliency – Diversity – Adaptable – Interdependence

Outline

• Brief overview of the problem- crop insurance-crops vs. whole farm revenue

• Motivation of the project- the AGR-lite Wizard

• Brief demonstration of the software tool

• What we learned and what we continue to learn

• Other examples

• Summary

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Why Insure Crops and Livestock?

Multiple Perils:

unavoidable natural occurrences

Including :

adverse weather

fire

Insects

disease

wildlife

earthquakes,

volcanic eruption

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Why Insure Crops and Livestock?

Why Insure Crops?- Price Volitility

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Field Corn Crop Insurance

Fresh Market Tomatoes Crop Insurance

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Important National Benefit for Agriculture

• Recently predicted that the federal subsidization of crop Insurance premiums could be close to $9 Billion dollars per year through 2022.

• Average premium benefit is about 62% of the cost.

• In 2011 over $11 Billion paid out in losses

• In 2012 could be as high as $22 Billion!

Is Good Crop Insurance for Small Diverse Farms Possible?

• “Good”- meaning reasonably priced and with effective coverage

• “Good”- meaning as good as current commodity or specialty crop-based policies

Is Whole Farm Revenue Insurance an answer?

Why Whole Farm Revenue Insurance Adjusted Gross Revenue Lite

• Crops with no Multi-Peril (Yield) or Revenue Insurance

• Commodities with premium prices

• Organic and specialty crops

• Varietal differences in yield and price

• Provides for quality losses

• Livestock

MOTIVATION of Project

Several reasons given as to why the use of AGR-Lite has been so low among farmers. Some of the reasons given are:

• COMPLEXITY: AGR-Lite requires farmers to have in place a fairly high-level and extensive farm and financial recordkeeping system to be able to meet application requirements .

• OUTREACH: The product is still not available nationally and some farmers may simply not know that the product is available in their state.

• LIMITATIONS: The level of coverage may be too low and deductibles too high to interest farmers. The effective coverage for AGR-Lite is 72% so that a 28% drop in revenue could be experienced before any coverage is provided. A 28% drop in revenue may effectively put a farmer out of business.

• LIMITATIONS: Commercial crop insurance agents find writing and filling claims for AGR-Lite complicated and very time consuming causing them to not promote the product to potential costumers.

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AGR-Lite Wizard

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• CD available for PC (no Mac version) - Sept. 15th for 2013

• www.agrlitewizard.com

SOFTWARE DEVELOPMENT IS HARD

• ENGAGE farmers(end users)– from the start

• Listen carefully to their needs (eligibility vs details)

• Extensive proto-type testing– get expertise, use real farmers

• NEW VERSIONS will be needed– IT overhead is real cost

• Good GRAHICS really help

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Critical Improvements

• Coverage too low- or deductable to high

• Premium costs do not decline with diversity

• Application process and information intensity needed to be lowered---AGR-lite Wizard helps

• Whole farm revenue should be available nationwide

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Other Examples and Needs?

• Food Safety Plan

• Conservation Management Tool

SOFTWARE can change the world 2012 Senate Farm Bill

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Summary

• Understanding of complexity can be enhanced by user-directed software tools

• User-directed software tools allow the user to choose how much and how little they want to understand complexity

• Knowledge is power and it helps with farmer /government bureaucracy interaction

• Understanding can help constructive democratic change

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