December 16, 2016
Every farmer with crop insurance knows they need to comply with the U.S. Department of Agriculture’s (USDA) Good Farming Practices (GFP) standard in order to maintain their coverage. Under guidelines established by USDA’s Risk Management Agency (RMA), farmers must undertake all the “generally recognized practices” that will give their crops the best chance to reach maturity and be harvested.
Up until last week, however, many best practices widely recognized and used by conservation-oriented farmers were not necessarily considered good farming practices by RMA. In fact, using some conservation practices promoted and defined by USDA’s Natural Resources Conservation Service (NRCS) – including planting cover crops, using Integrated Pest Management systems, or adopting advanced crop rotation strategies – could have endangered a farmer’s coverage and their indemnity payment for a lost crop if their crop insurance adjuster felt the conservation practice did not meet the GFP standard.
For several years the National Sustainable Agriculture Coalition (NSAC) has been urging RMA and NRCS to coordinate and address this situation. In June 2016, NSAC sent a letter to both agencies expressing our view that it is unconscionable that one part of USDA would encourage and reward a conservation practice, while another could penalize the farmer for employing the same practices.
Farmers have known about this incongruence, which has led many to forgo planting cover crops and undertaking other conservation practices out of fear of losing their crop insurance coverage. A recent National Wildlife Federation survey showed how lack of coordination at USDA affects farmers on the ground – 45 percent of survey respondents reported they were interested in cover crops, but didn’t utilize them because they were worried about how it would impact their crop insurance. Farmers, like these in Iowa, and Kansas, have also recently been speaking with the media about this issue and telling compelling and disturbing stories of being punished for promoting conservation.
New Handbook Provision
Finally, RMA has taken an important step toward correcting this problem. The newly revised RMA Good Farming Practices Handbook, released last week, includes an important addition to ensure that NRCS practices are also considered GFP. The new handbook states:
“NRCS Conservation Practices will generally be recognized by agricultural experts for the area as considered good farming practices.” Therefore, “the use of NRCS Conservation Practices will have no impact on Federal crop insurance coverage.”
That is where the good news ends, however. The provision is weakened by three qualifications in the handbook that could make the new, more reasonable approach far less effective than it should be in spurring greater adoption of conservation measures.
First, RMA will accept NRCS conservation practices only if the “practice does not negatively impact the insured crops ability to make normal progress toward maturity”. In plain terms, this suggests that in the eyes of the crop insurance industry and the agency that funds it, conservation practices illegitimately can get in the way of maximizing yield.
Second, RMA will require that following good conservation does not hold back the crop from reaching its yield target. In other words, practicing good conservation can be grounds for a farmer losing coverage if the crop insurance industry thinks that a particular conservation practice could theoretically hold back yields, or if they can actually demonstrate that it did.
Third, the new provision also provides for the possibility that some NRCS-sanctioned conservation practices can be determined to be “an uninsurable practice under the terms and conditions of the individual crop insurance policy.”
NSAC is very supportive of RMA addressing this issue. The long-awaited change puts RMA on the path toward ensuring that farmers who engage in soil and water conservation practices will not be penalized through their crop insurance. This is sound policy for two reasons.
First, as a matter of policy and government spending, we as a nation encourage farmers to adopt the very best and highest level of conservation achievable. We maintain that a crop insurance subsidy program that works against that goal is counterproductive, and sends the wrong signal to the farming community.
Second, rewarding advanced conservation should be at the very core of a good government approach to risk management. There is a growing body of research that indicates that many conservation practices can reduce yield variability and, over time, improve soil fertility and increase system resilience. These conservation-conferred benefits make farming systems more sustainable and can improve yields over time.
Sadly, it seems that RMA is still hedging its bets on conservation. The agency is still taking a short-term view, adding unnecessary caveats and leaving the door open to excluding specific conservation practices under certain crop insurance policies. These loopholes in the new policy mean farmers are still being forced to think twice about adopting good conservation, thereby diminishing the value of the new policy of recognizing conservation practices as good farming practices.
We at NSAC are still waiting for the time when these two USDA agencies will speak with one voice to farmers rather than pulling them in two conflicting directions. The new RMA policy is a small step in the right direction, but there is more to be done. We will continue to work with these agencies, and with the incoming Administration, to fix this problem.