shakerator
Member
- Location
- LINCS
Paying agronomist by yield results !
- Thread starter shakerator
- Start date
ollie989898
Member
I don't know the complete works of crop insurance I'm afraid.
4course
Member
- Location
- north yorks
The main is you are tied in and you need to ask what happens if your crop makes more than the original gross margin...
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That is the bit I would like to know ,but doesnt seem forthcoming as of yet
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That is the bit I would like to know ,but doesnt seem forthcoming as of yet
I cant get my head around how the crop insurance works frankly no matter how much I looked af it - even those selling it seemed to struggle !
on that basis ..... i’m out !
shakerator
Member
- Location
- LINCS
I do get it now
basically it’s a statistical financial product. The premiums based on reference yields not specific to your farm. So your insuring the general/ regional U.K. crop performance against, for example a 5 year average. What you do on your own farm to your own crop isn’t relevant
Hindsight
Member
- Location
- Lincolnshire
Similar to the Syngenta yield guarantee when they introduced Hybrid Barley. Your own crop was irrelevant. It was the non hybrid versus hybrid on a farm somewhere in the region - the honest broker was ADAS doing the harvesting. But to sign upto the bet you had to buy Syngenta fungicde and PGR products for your own crop. It was a bit of fun spread betting really.
shakerator
Member
- Location
- LINCS
here’s an idea
a fully functioning crop insurance product in the case of low yields around you
market price
tin hat ready
so of you produce above regional average usually is there any point ?
or is it relative ? ie you insure for 10t / ha in a area with usual regional average of 8t/ha - then say regional average is down 50% to 4t/ha - so you get paid out for 5t/ha regardless of how your crop actually performs ?
shakerator
Member
- Location
- LINCS
I would imagine it’s possible to outperform the regional average, and still get a payout but you’d have to check. There is no underwriting of your crop management
The Gross Margin is agreed on forecast yield and costs which are both based on past performance and trends eg if the 5 year average was 9 tonne per hectare but had been increasing we might agree on a figure above that. The reverse of that may also happen, particularly with osr on recent form.
Cost budgets are dealt with in a similar way although more adjustment is likely due to specific requirements of weed pressure on different fields, changes in varieties, disease resistance etc.
What I mean by vice versa is that where the gross margin is exceeded then the surplus is split between Agrii and the customer. So there would be a credit if crops fall short of the target and there would be a bill if they exceed the target. The agreement puts stops in to limit the maximum transfer of funds in either direction. The ratio in which surplus/deficit would be split is also by mutual agreement.
The complications are obvious and I’ve no doubt they will rule out the agreement in many places but the concept of shared accountability where the agronomist has a substantial input to the management of the crop is what I’m trying to drive.
Cost budgets are dealt with in a similar way although more adjustment is likely due to specific requirements of weed pressure on different fields, changes in varieties, disease resistance etc.
What I mean by vice versa is that where the gross margin is exceeded then the surplus is split between Agrii and the customer. So there would be a credit if crops fall short of the target and there would be a bill if they exceed the target. The agreement puts stops in to limit the maximum transfer of funds in either direction. The ratio in which surplus/deficit would be split is also by mutual agreement.
The complications are obvious and I’ve no doubt they will rule out the agreement in many places but the concept of shared accountability where the agronomist has a substantial input to the management of the crop is what I’m trying to drive.
4course
Member
- Location
- north yorks
thankyou for explaining the vice versa bit, but hell would freeze over before I would sign my independent life away on such a scheme
I used this when I was growing hybrid barleys. It paid out once, in a year when my own hybrids outyielded the conventionals but not the next when there was no lift on my own farm but one a time the local reference one. The husbandry protocols weren't onerous. I would have used a similar pgr and N programme anyway. You could still use other fungicides too as long a second you used the crappy Syngenta ones at least once in the programme. In the end the overall margin from hybrids was similar to good conventionals but with more work involved. The guarantee didn't make much difference but was a bit of a safety net.