Crop and Revenue Insurance Reform
Farming is inherently a risky business. Weather, pests, variable costs for inputs, and wild fluctuations in market prices for farm products create a volatile business environment and can cause farm income to vary significantly from year to year. A healthy farm and food system depends on public policies that help farmers manage risk effectively. Traditionally, farmers managed risk by growing multiple crops and raising a variety of livestock. If one crop failed or prices for cattle or hogs were low, then sales of other products would make up the difference. By contrast, current crop insurance policies are skewed in favor of less diverse crop production systems that are not only more vulnerable to markets, weather, and pests, but that also have serious environmental impacts.
To add insult to injury, organic producers have faced a 5 percent surcharge on insurance premiums and are only reimbursed for the conventional prices of what they grow if they face a loss. This despite evidence that organic cropping systems build soil fertility and inherently protect against weather-related disasters like droughts and floods.
In the 2008 Farm Bill the National Sustainable Agriculture Coalition (NSAC) fought to have the 5 percent premium surcharge for organic producers removed. While we did not succeed on that front, Congress has put the onus on USDA to collect data on an annual basis and adjust the surcharge as new information becomes available. The new farm bill also sets the goal for offering organic price election for all organic crops within five years.
NSAC is also still working to build on the experience of the current Adjusted Crop Revenue (AGR) insurance and Adjusted Crop Revenue-Lite (AGR-Lite) insurance — two products that are currently available in some states and best for diversified crop and crop-livestock farmers — to make a new whole farm revenue insurance option available to farmers everywhere. NSAC seeks a policy that would be structured in a manner to significantly reward diversification in recognition of its high environmental and risk management value.