One of my college friends recently accepted a position as a veterinarian with a practice in what will remain an undisclosed location somewhere in the upper Midwest. During a recent visit, I asked her if she had any James Herriot-esque stories to share from her first year as a vet.

"Definitely the guy who had his miniature donkey gored by his Tibetan yak," she said.

Seems that the two beasts had peacefully coexisted in the same field for quite some time. But that was before this particular miniature donkey gave birth. Shortly thereafter, while walking with her young near a pond, the new mother began to consider the nearby yak as a potential threat to her baby donkey. She apparently started to shove her yak friend around and (as often happens when you start shoving a Tibetan yak around) the yak's horn got in her way and subsequently stuck in the donkey's side.

Fortunately, I am happy to report that the vet says the donkey is doing okay. But the donkey still bears a hernia in its side that serves as a reminder to this basic rule of the wild: pushing a yak around can immediately place you in horn's way.

Don't yak around with PYO liability

This gory account illustrates what agriculturists already know: a farm of any kind can be -- and is -- a dangerous place to live and rear one's young. This year in Kentucky, we are seeing a pronounced interest in developing small scale Pick Your Own (PYO) fruit and vegetable enterprises around the state. Many parts of Kentucky contain folks still very interested in coming out to the farm to harvest their own berries, tree fruits, and vegetables. Producers investing in new small fruit crops, especially blueberries and blackberries, have been especially attracted to PYO marketing. PYO can solve a huge labor requirement at harvest and be significantly more profitable that wholesaling or on/off-farm retailing.

But producers that begin inviting customers onto the farm to help harvest a crop -- -or even to simply purchase a crop already harvested -- open themselves up to a number of previously unrealized liability concerns. Most farm liability policies do not offer liability protection for harm to customers coming onto the farm. Farm liability policies also do not offer product liability protection, which is essential for farmers who might be selling products that they have not produced themselves.

There are a few very basic steps that producers considering PYO or other on-farm marketing will need to take to begin to manage liability risk. In the spirit of avoiding being gored by avoidable liabilities, I'd like to offer a couple of starting risk management strategies for those considering adding PYO production to their operation in coming years. (Remember, these are only starting points for liability management. Each farm operation is unique, so only you and your insurance agent will be able to craft a liability risk management plan that precisely fits your operation.)

1) Yak with your insurance agent

Earlier this winter, I sat in on an excellent overview on farm liability coverage at the Ohio Fruit and Vegetable meetings in Toledo. The speaker was Jerry Hillard, Farmowner Product Officer at Nationwide Agribusiness/Farmland Insurance in Des Moines, IA. Hillard hammered home the following point throughout his talk: Nothing is more critical to evaluating new or additional farm liability needs than a conversation with your insurance agent.

In fact, Hillard said, it's a good idea for the producer to insist that their insurance agent visits their farm regularly--once every year or two -- and takes a look around. This type of visit becomes even more critical if the farm operator is about to begin inviting people onto the farm to pick their own produce. The producer's insurance agent is their expert consultant; it is the agent's job to identify and help protect from future liability. Nothing will help identify the operation's changing insurance needs more than keeping your insurance agent informed on what is happening on the farm, especially regarding who is regularly visiting the farm and what they will be doing there.

2) Pick your own liability coverage to match business changes

Farm producers are often under the impression that allowing people onto their place to pick their own produce will require enormous additional liability premiums. In some cases, large liability policy changes will be needed. Agritainment activities, like haunted forests, have a hard time meeting the definition of "farming practice" required by most farm insurance policies. Similarly, if a producer is quitting their traditional farming operations and relying solely on PYO or "agritainment" for farm income, significant additional insurance will be needed.

But most people starting PYO marketing are only doing so as a small part of their farm business. The PYO enterprise will be a profitable part of the farm, but will also generate a minor portion of the farm's profits. For farms where a PYO fruit or vegetable patch are clearly a secondary or minor business pursuit from the farm's main income generators, the insurance agent can probably offer some reasonably-priced solutions.

According to Nationwide's Hillard, the insurance underwriter should be able to offer farm producers an "incidental business activities endorsement" to cover activities that are secondary to the primary pursuit of the farm's business. This endorsement, said Hillard, is primarily for the producer who has added a PYO or other customer harvest endeavor as a minor part of their operation. This will add to the producer's annual insurance premium, but remember: the returns generated from a well-managed, small-scale, PYO enterprise are far more than enough to cover this cost of additional additional liability coverage.

Producers who use PYO production for a majority portion of their business will require additional liability needs. Insurance specialists emphasize that, in many cases, producers who begin to realize the added profitability that direct marketing activities such as PYO bring will expand their on-farm marketing activities over time. In such cases, it is important for the producer to have the necessary liability coverage in place as their operation changes its shape from a "traditional" farm to an operation where on-farm customers are forming the mainstay of its business. Here again, nothing can help liability coverage needs more than a good relationship with your insurance agent and updating them regularly on what is happening on the farm operation.

3) Keep your yaks away from your customers

Most liability claims against PYO producers come as the result of some sort of customer accident. Drake University law professor Neil Hamilton, an expert in agricultural law, makes this point in his 1999 book The Legal Guide For Direct Farm Marketing (click here for a brief review and more information about this book). Hamilton writes, "Many farmers with experience in pick-your-own ventures agree that no matter how careful a farmer is customers can find creative ways to injure themselves" (The Legal Guide For Direct Farm Marketing, June 1999, Drake University, p. 154).

A watchful eye and common sense inspection of the farm are good first steps toward minimizing injury liability risks for farm visitors. Clearly marking and regulating areas where visitors are allowed will definitely help minimize risk of their exposure to on-farm farm dangers (for this discussion, we might label such dangers as "yaks"). Guarding visitors from livestock and machinery that is nearby will also help keep farm premises in the "reasonably safe" condition that is legally required by insurance policies and many state statutes.

Here again, the producer's most valuable asset may be regular visits from their insurance agent and others with watchful eyes who can help identify potential danger spots on your farm. There are plenty of ways to eliminate or keep your farm's dangers (yaks) at safe distances from those customers who may now be occasionally coming onto the farm to pick their own produce.

Expect the unexpected

The short of it is, in any business, accidents can and will happen. The farm owner with the yak and miniature mother donkey did not anticipate that the new mother would bother his Tibetan yak to the point of her goring. Likewise, farm operators cannot guard against and foresee everything that could possibly happen to new visitors to their operation. But producers can take proper steps toward practices that will greatly minimize risk to their new customers -- and to their farm business.

The liability risks in a new PYO operation are indeed nothing to yak around about. However, with proper preparation and planning, proper liability safeguards can be put in place to avoid any gory situations. Proper attention to new liability concerns arising from a farm's changing marketing practices, then, will help ensure that a farm's new, small-scale PYO enterprise will only add to the farm's profitability and enhance that farm's relationship with its visitors and community.

Copyright 2003 Matthew D. Ernst