June 9, 2021
Last week, the United States Department of Agriculture (USDA) announced a new Pandemic Cover Crop Program (PCCP), which will offer a $5 per acre premium discount to producers who planted qualifying cover crops during the 2021 crop year and enrolled in eligible federal crop insurance policies. The PCCP is administered by the Risk Management Agency (RMA) and funds for this program are coming from the USDA Pandemic Assistance for Producers (PAP) program.
To receive this premium benefit, eligible farmers must file their acreage report with FSA by next Tuesday, June 15, 2021.
For additional details about the program and producer eligibility, click here.
The COVID-19 pandemic caused many producers to lose revenue which made it financially challenging for them to maintain cover crop systems. The PCCP mirrors popular premium rebate programs in Illinois, Iowa, and Indiana that support farmers who use cover crops as part of their rotations. However, unlike these programs, the PCCP is being offered retroactively as a relief program to farmers who planted cover crops this year.
Farmers have long known the benefits of cover crops and their value is even more evident today as farmers are up against climate change driven floods, drought, and unpredictable weather. Cover crop adoption is an essential practice to build resilient systems and mitigate risk. There is a strong body of research which demonstrates the numerous benefits that planting cover crops has on crop yields, soil health, and farmers’ bottom lines. The announcement of the PCCP indicates that USDA recognizes the data presented by the agricultural research community and the wisdom of farmers who use cover crops.
Despite these benefits, many obstacles remain to broad cover crop adoption. Just over 4.5 percent of land in farms is planted with cover crops – 15 million acres out of 320 million acres of harvested cropland in 2017. As we emerge from the pandemic, it is clearer than ever that there is room for dramatic improvement in these rates and that USDA should support farmers to adopt conservation practices that increase resilience in the face of production and market risk for individual farm businesses as well as our entire food system.
NSAC has long advocated for aligning crop insurance with conservation practices. The PCCP is a welcome support to farmers who have been impacted by the pandemic, and may represent an important first step toward aligning crop insurance with soil and water conservation in the future.
The PCCP could cost up to an estimated $75 million (out of the $6.5 billion available through PAP) if all producers who planted cover crops on 15 millions acres received the PCCP premium. However, not all farmers who plant cover crops are enrolled in eligible crop insurance policies; in fact, farmers who adopt cover crops and additional practices to diversify production appear less likely than conventional farmers to enroll in crop insurance.
For these farmers, especially small farmers, diversified and integrated production strategies are natural risk-management strategies.
If these farmers were to enroll in crop insurance, the Whole Farm Revenue Protection (WFRP) program is a natural choice tailored to sustainable producers. WFRP is the only crop-neutral revenue insurance policy available nationwide designed to protect a farmer’s entire operation – insuring all crops and livestock under one policy, not just one crop. NSAC is thus disappointed that WFRP is explicitly excluded from the list of eligible federal crop insurance policies under PCCP.
“Encouraging cover crops is a good thing,” said Scott Marlow, Long Rows Consulting, in response to the program’s announcement and its exclusion of WFRP. “But we have to be careful that rewarding the adoption of one facet of resilience (cover crops) in one sector of agriculture (crops eligible for standard crop insurance) isn’t reinforcing the drive toward industrialization that got us here in the first place. Are we creating an economic disadvantage against more fundamental elements of systemic resilience like crop diversity, integration of crops and livestock, higher-value and more diverse markets, and diverse farm scales?”
The PCCP was announced on June 1, 2021, giving farmers just two weeks until the June 15 deadline to adjust course at one of the busiest times of the growing season. The accelerated acreage reporting deadline will be a challenge for many farmers who were not already planning to submit their forms early, especially considering FSA County Offices are not yet open to the public without appointments per COVID-19 safety protocol.
NSAC understands that this is a new program and that an early deadline for farmers to submit acreage reports will enable RMA to process payments before the August 15, 2021 premium billing date, but insufficient notice will hamper the reach and effectiveness of this program. While PCCP is looking at planting decisions made in the past, NSAC hopes that USDA will use this as a first step and extend the program to incentivize cover crop adoption into future planting years.
The PCCP will be a welcome support for eligible farmers who have been impacted by the pandemic as they work to maintain their cover crop systems. But this model is not perfect and it is important to recognize its limited ability to bolster food system resilience.
In the short-term, NSAC urges USDA to implement comparable support for farmers enrolled in crop insurance policies that are excluded from the PCCP, including WFRP, that better serve small, mid-size, diversified, and organic producers. In addition, we recommend that RMA consider extending the June 15 acreage reporting deadline given insufficient notice at the height of the growing season for farmers and reduced accessibility of FSA County Offices.
Looking ahead, there is a distinct possibility that levels of PCCP participation may be used as a proxy for producer interest or as a test run before USDA introduces a permanent iteration of this program. If true, NSAC recommends that any future program in this mold include WFRP as an eligible crop insurance policy. In addition, we feel that advance acreage reporting submission will only curtail participation, particularly among small or low resource farmers for whom the administrative burden is considerable, and should be extended to match the normal acreage reporting deadline.
Fundamentally, the PCCP is a relief program designed to retroactively reward farmers who planted cover crops during a financially difficult year. NSAC strongly recommends that any future program created in the mold of PCCP be designed as a proactive initiative to encourage more farmers to adopt cover crops, as well as continue to reward farmers who maintain cover crop systems.
While a $5 per acre premium is a relatively small reward that will not meaningfully offset the significant upfront costs that farmers face when adopting cover crops for the first time, especially for low-resource farmers, the Sustainable Agriculture Research and Education (SARE) program survey suggests that a discount through crop insurance would be one of farmers’ preferred types of conservation payment.
These recommendations to improve PCCP, or shape a future iteration of the program, should be undertaken as a suite of additional actions which USDA could use to more effectively incentivize conservation practices as risk management tools. NSAC and our member organizations look forward to continuing to work with USDA to implement meaningful reforms that align conservation programs with crop insurance to actively bolster the long-term resilience and competitiveness of our country’s farmers.