DES MOINES — One thing the discussion about African swine fever has made clear is farmers need to have a plan in place for how to deal with an emergency. That plan must be about more than disease control — it must also be about the whole idea of risk management.
Risk management was the subject of a panel at the Iowa Pork Congress here Jan. 23, where legal and insurance experts offered some advice.
Matt Berger, an attorney with Gislason & Hunter LLP, offered a basic checklist. First, he said, producers need to sit down and identify and assess potential risks. Those may range from disease to fire to tornadoes.
Second, they need to review their production and marketing contracts. That means understanding who is responsible for any problem. For example, the producer needs to know if he or she is responsible for delivery of livestock or not.
The third thing to look at is whether there are regulatory reporting requirements for certain types of risk. Not reporting a problem could lead to large fines or other legal action.
The fourth thing to look at is insurance coverage. Some policies may only cover certain types of disasters. Others may have a financial limit.
Finally, Berger said, it is important to draw up a disaster plan. Have it in writing, and know where it is.
There are insurance policies for livestock production businesses, but the details vary, according to Marty Pippett of Mark Crop Insurance.
“You need to talk to your agent,” he said.
Among the questions to ask are whether the policy covers care custody control (which may be important if there are negligence concerns) or whether it covers a loss of income or pays for items such as yardage replacement. Business interruption coverage could be important.
Pippett said there is such a thing as foreign animal disease insurance available because many normal insurance policies may not cover disease risks.
Still, much of the challenge lies in the original list laid out by Berger. For example, when identifying potential risks, farmers need to consider both internal and external risks. Equipment fails (such as what happens if the fans in a confinement stop working) or manure leaks are certainly potential risks. So are fire, disease, tornadoes or floods.
It is worth thinking about the things that may have to be done — and done quickly — in the case of an emergency. There may be a need to dispose of dead animals, to care for surviving pigs which suddenly don’t have shelter or food readily available, to find new pigs to stock a facility, to clean up a facility or rebuild.
And contracts are very important, Berger said. What on-going obligations do you still have? Are you still expected to deliver a certain number of animals on a certain date? How long is that requirement extended and what triggers a termination of a contract?
Some contracts may, for example, have an out if performance is impossible, but not necessarily if it is simply uneconomical.