Uncertainty in prices, yields, government policies, and foreign markets means that risk management plays an important role in many farm business decisions.
Government programs addressing farm risk management have also played a larger role in U.S. farm policy in recent years; over 270 million acres are now covered by crop insurance, and government insurance subsidies exceed $5 billion annually.
ERS analyzes farm business risks and risk management strategies, as well as government programs that address farm risk management. Strategies investigated include:
- Yield and revenue insurance,
- Futures and options,
- Contracting sales and purchases,
- Enterprise diversification,
- Debt management and credit availability, and
- Off-farm employment.