Crop Insurance Proposal to Lower Premiums for Good Stewardship

Posted on Monday, September 2nd, 2013 by Renata Brillinger

Reposted from the National Sustainable Agriculture Coalition (NSAC)
August 29th, 2013

The Natural Resources Defense Council (NRDC) recently launched an online tool that shows extreme weather-related crop loss by state and county.  The risk of crop loss from these weather events, like droughts and floods, can be mitigated through sustainable soil management practices like cover crops, crop rotations, and conservation tillage.  NRDC is proposing that insurance companies work with USDA to create a pilot program to reduce Federal Crop Insurance Program (FCIP) premium rates for farmers who use these risk-reducing practices.

According to NRDC, “rather than incentivizing farmers to adopt risk-mitigating farming practices, FCIP premiums are set using a formula that ignores how important healthy, regenerative farming practices — like conservation tillage, cover cropping and improved irrigation scheduling — are to farmers’ risk management as they increasingly face the threats of drought, floods and other extreme weather events[…]  NRDC recommends that FCIP launch a pilot program that reduces premium rates for farmers who apply low-risk/high-reward farming methods to reduce the risk of crop loss.  Premium rate reductions offered to farmers in the pilot program would more than pay for themselves thanks to avoided indemnities created by risk-reducing farming practices[…]”

NRDC’s announcement follows a series of USDA actions regarding the benefits of planting cover crops.  USDA Secretary Vilsack recently spoke on the valuable role of cover crops as a climate change adaptation tool.  Simultaneously, USDA released new cover crop guidelines to facilitate farmers’ ability to plan cover crops and still qualify for crop insurance subsidies.  And USDA’s Sustainable Agriculture Research and Education (SARE) program recently released results of a survey confirming that cover crops contribute to increased cash crop yields.

NSAC agrees with NRDC that reducing the crop insurance premium for farmers engaging in these soil-conserving practices should not be a substitute for requiring conservation compliance from all farmers who benefit from federal crop insurance subsidies.  But NRDC’s proposal could provide an incentive and reward to farmers who exceed a conservation compliance baseline.

Although the future of the farm bill remains uncertain, NSAC continues to work to ensure that crop insurance premium subsidies are linked to basic conservation compliance.  This linkage was included in the most recent Senate farm bill, but not in the House farm bill.

For additional information on NSAC’s 2013 farm bill crop insurance reform recommendations, click here.

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