Farming is a risky business physically, mentally, emotionally, and financially.

I find the five biggest risks in agriculture are price, weather, bug pests, weed pests, and government. These all relate to production risk (areas of risk are production, marketing, financial, legal, and human resources). If more of your income comes from marketing and less from production, then you are more in control of your price and you have removed most of the big risks of farming.

Marketing and production are just the tip of the iceberg in farming risks. If you have a U-Pick operation with the public coming to your farm to personally get your product, you will have to contend with liability from someone tripping on your property or eating something they should not. These are just a few examples of problems you face. If you hire employees and they drive your vehicles, you are responsible for their actions and accidents. If you have livestock, you must keep them fenced on your property. If your cow is standing in the middle of the road and is hit by a car, you are liable. Processing berries into your jam adds value to your produce—but increases your liability risk. Operating farm machinery always entails risk, no matter how careful you are. If hired labor operates the machinery and gets hurt, you are responsible if you ignored things like tractor roll bars and safety shields on power take-off shafts.

There are so many positives to agriculture, people are often uncomfortable talking about the risks and liabilities involved. The fact is, today we live in a litigious society. You are foolish if you do not protect yourself, your family, and your assets.

You certainly do not want to work all your life building a business, assets, and savings, just to have it all go to the government, or want your children to have to sell the farm and business to meet the tax bill.

This is just a reminder that if you have not taken care of your farm business with a living trust and other appropriate documents, insurance, etc., now is the time. You never know what tomorrow will bring. More articles on this are in the Risk Management section.

Yes, it will cost you time and money today, but it will save you time and money from this day forward.