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Crop Insurance Rules Challenge Organic and Sustainable Farming Practices

September 30, 2021

Photo credit: Lindsey Scalera

Editor’s Note: This is a guest post that originally appeared on Midwest Organic & Sustainable Education Service’s blog, Organic Broadcaster. MOSES is an NSAC member based in Spring Valley, WI, and promotes organic and sustainable agriculture by providing the education, resource and expertise farmers need to succeed in the region. Written by Jeff Schahczenski, Agriculture and Natural Resource Economist from the National Center for Appropriate Technology (NCAT), another NSAC member.

“I am a regenerative organic farmer, and I want to limit tillage and assure soil health, but crop insurance rules get in the way of developing a resilient system in the face of growing extreme weather and climate disruption.”

Craig Schmitt, organic grain farmer, Wolf Point, Montana.

I wish that Mr. Schmitt’s problem with crop insurance rules and complexities were an exception. The issue of how the USDA Risk Management Agency (RMA) defines organic, sustainable, and good farming practices continues to cause significant problems for farmers and ranchers trying to develop climate friendly and resilient systems of production in the face of climate disruption. Many national organizations and federal policymakers worked to change the negative impact of crop insurance rules on the adoption of innovative organic and sustainable practices during the 2018 Farm Bill debate, with limited success. 

The federal crop insurance program rules are set by the Federal Crop Insurance Corporation (FCIC), administered by the RMA, and implemented through federally subsidized policies serviced by 14 private crop companies (known as Approved Insurance Providers). The rules view past practice as the key determinant of the future. Any deviation from past farming practices that jeopardizes the insured crops’ “ability to make normal progress toward maturity and produce at least the yield used to determine the production guarantee or amount of insurance” is by the federal crop insurance program definition, NOT a Good Farming Practice (GFP).  

The innovative changes in practices that are very familiar to sustainable and organic farmers can jeopardize crop insurance coverage because of the likelihood that such practices may have some, difficult to predict, impact on yield. These practices include cover cropping, green-manuring, inter-seeding of cash and non-cash crop, integrating livestock into cover crop production for forage and termination, development of long complex rotations, varying planting spacing, alley cropping, prairie strips, and changing degrees of tillage intensity. But yield maximization is not the only goal for resilient production systems that can adapt to coming climate disruption and neither should it be the only focus of our federal farm programs. 

The 2018 Farm Bill attempted to solve these problems. The Senate version of the bill would have required that all conservation-oriented practices be automatically qualified as GFP. The final version of the bill unfortunately cut this back to apply only to cover cropping, and then only when the farmer followed either evolving cover crop termination guidance set by the USDA Natural Resources Conservation Service or received approval by identified agricultural experts.  

Unfortunately, the Natural Resources Conservation Service guidance on cover crop termination has not kept up with emerging better practices developed by farmers and cover crop researchers. Moreover, farmers have little time to search out official sanction by non-farmer experts who often do not have easy answers on how best to adopt a given innovative conservation practice in each ecology and each soil type and cropping system, without impacting historic yield.  

What are the solutions? 

First, implement policy changes that severely limit the responsibility of the FCIC and RMA in regulating what constitutes good farming and ranching practices. Actuarial accountants, crop insurance agents, and insurance adjusters have limited understanding of what good farming practices are or how they are evolving for particular types of farming and ecologies. Only if a crop insurance agent or adjuster has evidence of fraudulent behavior, where a farmer or rancher is purposefully and willfully engaged in the destruction of their insured production to garner an insurance claim, do they need authority to limit or terminate payment of claims.  

Second, any farming and ranching conservation practices that are defined and financially supported by USDA Natural Resources Conservation Service, ought to meet a minimum standard of a good farming practice, without any requirement that the farmer prove that the practice will have zero yield impact.  

Third, when certified organic farmers and ranchers are following an approved Organic Systems Plan, this ought to suffice as evidence that good organic practices are being followed.  

Finally, further research using crop insurance data to assess the relative yield and price risks of varying systems of production is critical in these times of extreme weather and climate crisis. This is not so much needed to further lower the premium rates of a highly subsidized system of insurance for crop and livestock production, but rather to suggest paths toward further innovation that are critical to the economic viability of farmers and ranchers and their communities.  

Scientists agree that extreme weather and climate disruption is going to be our future. Farmers and ranchers need insurance in the short term to weather this future. No matter how resilient the farming or ranching practices that are used, floods, droughts, winds, fires, pests and even volcanoes will continue to be destructive. 

Crop insurance is a double-edged sword. On the one hand, crop insurance has tended to reinforce current agriculture practices that are significantly climate-unfriendly and that have been made less risky by subsidized insurance. On the other hand, it has been helpful in maintaining some degree of economic and productive viability which in turn allows farmers and ranchers the very ability to engage in often needed risky production system changes. Growing research is likely confirming this conundrum (AGree, 2021; Wang, R., et. al., 2021).  

Mr. Schmitt and other farmers are still waiting for a satisfactory solution to their desire to continue down the path of adopting organic regenerative practices without jeopardizing their ability to be insured through the federal insurance program. The USDA can and should make the needed changes in their policies to remove these barriers to the improvement of a longer-term resilient system of production. 

Further Resources: 

For a more detailed discussion of the issues discussed in this article visit attra.ncat.org for many National Center for Appropriate Technology and ATTRA publications. You may also continue to browse NSAC’s website for additional blogs and resources.

Categories: Carousel, Commodity, Crop Insurance & Credit Programs, Conservation, Energy & Environment, General Interest, Implementation & Rule-making, Organic

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