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Pandemic shines light on strategies that help farmers build resilient businesses

By Rachel Armstrong

As destabilizing as the COVID-19 pandemic has been for farmers and food producers nationwide, it has also opened our eyes to new opportunities and solutions. We’re having conversations and exploring new ideas about how to build strong individual farm businesses that can work independently as well as collectively to protect our country’s food system, if and when tragedy strikes again.

The good news is that there are many opportunities for producers to increase their farm’s resilience during this time. Even though we can’t singlehandedly build new processing plants or fix a broken postal system, we can look at the particular tools we are using to be better prepared in case we get sick, employees get sick or injured, or we need to adapt quickly to new market channels. When we consider our options and make clear choices, we can rest easy at night. Some of us will choose to continue taking risks, and that’s perfectly acceptable. Being able to make that conscious, informed choice is the foundation of a good night’s sleep for farmers and ranchers everywhere.

The COVID-19 pandemic exposed many farmers’ vulnerability to sickness and injury. Contracting this disease not only risks the health of individual farmers, it risks the health of their business as a whole. Being laid up in the hospital during the wrong time of year means that no one is driving the combine, delivering orders, or making crucial decisions about marketing and hiring, to name a few examples. Loss of revenue and individual farmer income is a serious risk with repercussions that can continue for years in the form of high-interest rates on debt and degraded relationships.

Two primary solutions are available to alleviate this risk. First, look into the costs and benefits of private disability insurance (as distinguished from social security disability, which is not discussed here). Private disability insurance can provide you with lost wages when you cannot perform your job because of illness or injury. The fine print matters, though. For any policy, be sure you are okay with the waiting or exclusion period, the time after which you become unable to work but before the policy benefits kick in. Also, make sure you’re perfectly clear on exactly how your benefits will be calculated. Will your income from self-employment be determined by looking at your net income on a Schedule F? That might not work if your previous year’s tax returns show a loss. Looking at how much income the policy may provide, is it worth the cost? Lastly, be sure to confirm with your insurance agent whether the particular tragedies in your mind are covered: a COVID-related illness? A tractor roll-over accident? Ask questions!

Workers’ compensation insurance is another choice. Although many farmers are not obligated to carry workers’ compensation for their employees, and the majority also do not have to carry it for themselves, some farmers choose to cover themselves with a policy. These farmers are attracted to the fact that workers’ compensation covers lost wages (at a percentage) as well as mileage to doctor visits and a benefit for suffering a loss of limb, permanent disability, and death, for example. Of course, there are limitations, with the primary one being that the injury must have been in the course of work. That can be difficult to prove if we’re talking about COVID-19 illness. Farmers also may not be able to see their regular doctor if the injury is covered by a workers’ compensation policy. Again, each person will have to weigh the costs and benefits for themselves.

Farmers also endure the huge risk of their employees getting sick or injured. Any effort a farmer can devote to helping workers prevent problems and get back on their feet may be a wise choice.

First and foremost, farmers can do many things to prevent the risk of COVID-19 transmission at the workplace. Most farmers are likely already increasing sanitation procedures and requiring masks while working. Consider using a cohort-based approach to task assignments so that individuals are only exposed to a limited number of colleagues while at work. An ounce of prevention being worth a pound of cure, consider what you can do to empower workers to get a vaccine. Time off and educational materials can incentivize participation. Employers are legally allowed in many circumstances to require a vaccine as a condition of continued employment. At the same time, opinions vary on the moral suitability of that path, especially considering the negative experience of many farmworker populations when it comes to public health and medical research initiatives.

Early in the pandemic, the news coverage and politicians focused on potential liability for business owners whose operations contribute to spread COVID-19, either among employees or customers. The risk of legal liability for transmission between workers is much reduced where the business is following best practices. Review the Centers for Disease Control’s checklist for agricultural risk assessment and control planning for COVID-19 for a full list of recommendations.

When it comes to liability for transmission to customers, the risk is quite small for a couple of reasons. It will be difficult for most customers to demonstrate that the farm was indeed the source of their transmission. And, even if a customer is able to establish that, they would likely need to prove some form of negligence or wrongdoing, which will be challenging.

Faced with the closing of restaurants and loss of farmers market sales among others, many farmers turned to alternative platforms like direct-to-consumer sales, home delivery, and working with other farmers for multi-farm CSAs. Farmers having success with these platforms and hoping to stick with those avenues should spend a little time considering the new legal risks they pose. Auto insurance is a big one. Talk to the farm’s auto insurance agent to make sure any employee driving off-farm is covered, whether they are driving the farm vehicle, a rental, or their own. Also, look into employment law obligations. Doing home delivery and packing boxes with other farmers’ contents is often not considered agricultural labor. In that case, the farm might need to start buying workers’ compensation, paying into unemployment insurance, and paying at least the minimum wage if they weren’t already. Because many farm businesses are exempt from these legal obligations when assigning workers farm tasks, they become vulnerable if they cross into activities considered non-agricultural.

Developing legal resilience is a lifelong path for many farmers. At each point in the farm business, and with each new circumstance, the right strategy may shift. But it doesn’t have to be overwhelming. Prioritizing and risk management are skills every farmer has developed—it’s the nature of the job. You have the mindset necessary to be successful with legal risk management, too.

If you need additional resources on legal risk management, check Farm Commons. Farm Commons is a nonprofit that helps farmers understand and resolve their farm business law issues. We especially recommend our online workshop “Discovering Resilience:
A legal workshop for farmers and ranchers.” This online workshop gives farmers and ranchers the fundamental tools to manage legal risk throughout the life of their operation.

Farm Commons has restructured to a membership-based model. Members have access to in-depth guides and sample documents, interactive online workshops, and a community forum to get feedback. Producers may sign up by June 1, 2021, to receive an annual membership for $49. 

Rachel Armstrong is an attorney and founder of Farm Commons.

From the March | April 2021 Issue


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