It’s the time of year when marketing cranks up for all the companies that peddle peace of mind products. In fact, when you think about it, almost everything sold to farmers is a peace of mind product.
Did you know that you should treat your seed with Product X so you can sleep at night? Or that you should plan on a micronutrient package for your crop just in case? After all, it’s only a minor cost and it’s better to be safe than sorry. You wouldn’t want a micronutrient deficiency limiting your yield potential.
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If you buy all the products that are supposed to add five or 10 percent to your yield, you’ll surely have at least twice the crop that your neighbours grow. Pile enough inputs one on top of the other and you’ll spend your way to prosperity in no time flat.
News flash. Even legitimate inputs don’t always generate a return on investment.
Certified seed has quality guarantees for purity, weed seed contamination and germination, but farm-saved seed can often meet the same standards. Of course, you need to do the testing and not just assume your seed is good.
Fungicides can make you money, but they might not if there isn’t much disease present or if application timing is off. With weed control, you can see the weeds and you can see if herbicide application has been effective. It’s much more difficult with fungicides, which typically should be applied before you even see disease symptoms.
Do you assess the risk of disease on a year-by-year and crop-by-crop basis taking weather conditions into account or do you just apply a fungicide or two for peace of mind?
And we should all be killing weeds with several different chemistries to minimize the risk of herbicide resistance. This may be a legitimate recommendation, but economics and practicality also come into play.
Then there are the various insurance offerings. Producers will be making decisions on their crop insurance coverage in the next couple months. Differing pricing options are available, as are different levels of yield coverage.
However, crop insurance is production insurance and doesn’t protect you from falling prices. For that, some private insurance offerings such as Global Ag Risk Solutions are available. You can protect your gross margin, but it comes with a sizable price tag.
And then there’s hail insurance, with both public and private companies competing for your business. This really is a peace-of-mind product for every time thunderclouds start building on the horizon.
Crop insurance has a large public subsidy component. Over time, farmers collectively will receive more money than they pay in premiums.
With all the other insurance offerings, the odds are on the side of the companies. Over time, they have to collect more money than they pay out and they also have to pay their administration costs.
Self-insurance may be a great concept, but not many of us have the financial resources to risk large losses without any form of coverage.
If you really want to become depressed, consider the four Ds and how they may affect your farm and family — death, divorce, disability and disaster. See your lawyer for the divorce risk and insurance companies for the other three.
You can’t blame companies for promoting their products and services, but marketing campaigns that prey on human insecurity wear a bit thin.
