Researchers launch farmer decision tool to help navigate risk management choices

FAYETTEVILLE — Farmers grappling with difficult risk management choices now have a powerful new online tool that's born from years of data collection and months of refinement.

The Arkansas Crop Decision Support Tool was developed by Eunchun Park, assistant professor of agricultural economics and agribusiness and researcher for the Arkansas Agricultural Experiment Station. The experiment station is the research arm of the University of Arkansas Division of Agriculture.

"The idea came from a pretty simple problem: Farmers have to make several risk-management decisions that are connected, but the information is often spread across different conversations," Park said. "Crop insurance, ARC-CO versus PLC, production costs, cash rent and post-harvest marketing are usually discussed separately. But on the farm, those decisions affect each other.

"I wanted to build a tool that brings those pieces together in one place," he said.

ARC-CO, or Agriculture Risk Coverage, and PLC, or Price Loss Coverage, are types of insurance administered by the Farm Service Agency of the U.S. Department of Agriculture.

Park said the current version was developed over the past several months, "but it builds on research and data work that had been underway for several years."

"The tool itself came together as we started combining crop insurance modeling, farm program analysis, production cost assumptions and grain marketing logic into one application," Park said.

Ease of use

While risk management is difficult, using the tool isn't.

Ease of use "was actually one of the main goals," Park said. "A producer or agent should not have to know the technical modeling behind the tool to use it.

"The user enters basic information, including county, crop, irrigation practice, yield history, insurance choice, program choice and storage option," he said. "The tool then helps organize the comparison."

In developing the tool, "I focused on the decisions that producers and county agents are most likely to talk through together," Park said.

"I also wanted the tool to show risk in plain language, so the tool reports downside risk outcomes as 1-in-5, 1-in-10, and 1-in-20-year scenarios rather than technical language," he said.

The tool is also mobile friendly and usable on a variety of devices.

Limits to guidance

Park said it's important for users to know that the tool "is not an official crop insurance quote system, and it is not a guaranteed price forecast."

"The tool is designed for educational scenario analysis and planning discussions," he said. "Final insurance decisions should still be verified through official crop insurance channels."

Park said the tool is most useful when users enter farm-specific information, especially yield history, production costs, and rental arrangements.

"It helps compare tradeoffs, but producer judgment and local knowledge still matter," he said.

Continual improvement

Park said the tool, introduced in late April, is still in beta testing.

"We are updating it as we receive feedback from agents and users," he said. "Some data inputs, such as budgets, futures prices, yield files and basis information can be updated as new information becomes available. The plan is to keep improving both the data and the user interface over time."

To learn more about ag and food research in Arkansas, visit aaes.uada.edu.