Risk Management & Crop Insurance

Risk Management

There is risk inherent in any business, where risk is the possibility that something could go wrong that would affect the health or goals of the business. For farms, these risks may include everything from pest pressure and adverse weather conditions to equipment failures, legal liabilities, loss of markets, or inadequate labor. 

Risks have to be managed to preserve the viability of the business. Strategies for managing risk on a farm include growing a diversity of crops or crop varieties to protect against pests and satisfy markets; keeping tools and equipment in good condition; following a strategic business plan; understanding and complying with the regulations that affect the farm; and providing adequate training to employees. 

The particular risks faced by farms are often broken down into 5 main categories: Production, Marketing, Financial, Legal and Environmental, and Human Resource Risks. 

boxes listing the 5 big risks faced by farmers

See The Big Five Risks Faced by Farmers (New England Vegetable Management Guide).

See also:

USDA Economic Research Service Risk Management 

Crop Insurance

One of the main tools people use to deal with uncertainty and manage risk is insurance. Farmers likely have several different kinds of insurance with different companies: health, life, vehicle, business, or property insurance. 

Crop insurance protects specifically against losses of crops or related revenue. The program is a partnership between the federal government and private insurance companies, where policies are developed by the USDA’s Risk Management Agency and sold through authorized private insurance agents, or AIPs (approved insurance providers). Losses must be due to an eligible cause, including adverse weather, fire, insects, plant diseases, wildlife, or market price declines. 

USDA Risk Management Agency Fact Sheets:

Insurable Commodities in Massachusetts

Links below are for USDA Guidance Documents for each of the commodities listed, where available.

Crops

Other Programs

See the USDA Risk Management Agency policy locator maps for Commodity Programs and Livestock Programs to see which policies are available by county. 

 

Non-Insured Crop Disaster Assistance Program (NAP)

Where crop insurance is not available for a given commodity or commodities, another option is the Non-insured Crop Disaster Assistance Program, or NAP. This program is administered by the USDA Farm Service Agency and provides financial assistance to producers of non-insurable crops when low yields, loss of inventory, or prevented planting occur due to a natural disaster.

NAP provides catastrophic level (CAT) coverage based on the amount of loss that exceeds 50% of expected production at 55% of the average market price for the crop.

Producers have the option of purchasing additional coverage levels ranging from 50-65% of production, in 5% increments, at 100% of the average market price. Additional coverage must be elected by a producer by the application closing date. Producers who elect additional coverage must pay a premium in addition to the service fee. Crops intended for grazing are not eligible for additional coverage.

For all coverage levels, the NAP administrative fee is $325 per crop, with a limit of $825 per producer per county, not to exceed $1,950 per producer nationwide.

Producers who elect additional coverage must also pay a premium equal to the producer's share of the crop times the number of eligible acres devoted to the crop times the approved yield per acre times the coverage level times the average market price times a 5.25% premium fee.

The NAP administrative fee does not apply if you meet the definition of a beginning farmer, limited resource farmer, socially disadvantaged farmer, or veteran farmer. Individuals listed above are also eligible for a 50% reduction to the cost of additional coverage under NAP. Contact your local FSA Office to see if you qualify along with the required reporting requirements.

See the USDA-FSA NAP Fact Sheet or contact your local FSA Service Center

 

Current UMass Extension Projects

 

Crop Insurance Strategies for Specialty Crop Growers in MA 

2025 Northeast Extension Risk Management Education, Producers Underserved by Crop Insurance 

NERME logo

This work is supported by the Northeast Extension Risk Management project award no. 2024-70027-42540, from the U.S. Department of Agriculture’s National Institute of Food and Agriculture.

 

 

Related Events & Outputs:

One Size Does Not Fit All

Friday, January 9, 2026

NEVBGA 612th mtg, Northampton, MA. 

Presentation by Devon Smolak, Eastern Shores Crop Insurance 

Insuring your Most Valuable Asset: Your Crop

Saturday, February 7, 2026

NEVBGA 613th mtg, Sterling, MA.

Presentation by Colleen Kisselburgh, Arthur Carroll Insurance 

Risk Management Strategies for Small, Diversified Farms

Sunday, February 8, 2026

Southern New England Agricultural Conference and Trade Show, Bristol Aggie High School, Dighton, MA. 

Presentation by Lisa McKeag, UMass Extension

Massachusetts Agricultural Risk Management Forum
Title slide for Massachusetts Agricultural Risk Management Forum

Friday, February 13, 2026, Grafton, MA and Online. 

Presentations by:

  • Kevin Wooten, Regional Director, USDA Risk Management Agency, Raleigh, NC

  • Julie Jacque, VT-FSA

  • Winton Pitcoff, MDAR Deputy Commissioner/Legislative and Policy Director

Presentation video: https://www.youtube.com/watch?v=kzpXcR4bi9U
 

 

Enterprise budgets: Using crop budgeting data in farm financial decision-making
Title slide for Enterprise Budgeting Webinar

Thursday, April 9, 2026 online

Presentations by:

  • Vern Grubinger, UVM Extension
  • Jim Ward, Ward's Berry Farm, Sharon, MA
  • Bailey Albert, MA-FSA

Presentation video: https://youtu.be/gONtCgANgAs