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This project was funded thru a partnership with
US
Dept. of Agriculture
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Why is this project important? The future for most small scale farmers and ranchers lies in the direct marketing of their product, at least in reducing the number of steps from producer to consumer. Traditionally, there are many players in the distribution and marketing of food products so that the liability for harm is pretty much removed from the producer. The Marketer, processor, distributor, and retailer are all parts of an extended food chain, thus dispersing the locus for liability for harm to the consumer. Direct marketing changes this picture. Now the responsibility for harm comes back directly to the farmer/rancher who is the producer, marketer, processor and distributor. The buffer for liability has now evaporated. Most small farms are sole proprietorships. The farmer/rancher owns and operates the business by themselves. This structure is especially suited for this type of business but there is no protection from debts and liabilities of the business. If a customer does experience harm related to the farm enterprise and seeks damages, then the owner’s assets are not protected by the business structure. Consequently, our “New American Farmer” must take steps to prevent harm and to have appropriate liability insurance in place to protect against potential lawsuits. Understanding insurance coverage and costs is the first step in obtaining appropriate protection. This information also is important for marketing and pricing. Insurance is a necessary cost that must be included in pricing of products much the same as seed, labor or fertilizer. There is considerable apprehension and antagonism in dealing with insurance agents. Some of this concern comes in part from the farmer/rancher’s lack of knowledge about insurance and the insurance business, and in part from the limited experience most insurance agents have with small farms. An agent’s typical image of a farm is one where a crop is planted, harvested and taken to the appropriate warehouse or sale yard. Farms that direct market their products are a relative “unknown” to most agents. This material explains why insurance is important and how to work with your insurance agent to get the protect you need ant the lowest possible cost. Information on the various elements of a farm liability policy is included as well as how to read a policy to determine what and what isn’t included in your policy. What will I learn from viewing the site? These documents cover the three main things that might get farmers/ranchers into trouble: premise liability, product liability, and employment and labor. These documents present the issues inherent with each area of liability and give ways the farmer/rancher can reduce the possibility of liability for harm to the consumer. When viewing this site you will observe that direct farm marketing and agritourism are integral components of agriculture in Washington. These materials will help to promote these trends and will show why appropriate protection is necessary and helpful in marketing directly to consumers. These materials will provide a framework for understanding and analyzing potential liability risks including premise and product liability and obligations with respect to employment and labor. Included in these materials are checklists that help to identify and reduce the possibility of harm to consumers. Information is included on the insurance industry and as well as a list of questions that farmers/ranchers need to consider as they negotiate with an agent/broker on a farm policy. Various elements of a farm liability policy are included as well as how to read a policy to determine what and what isn’t included in your policy. |
Supporting Resources:
What is Direct ***** ***** ***** *****
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