Crop insurance has been an important part of farming for the last half-century or longer, and is becoming more and more important as farming becomes an increasingly risky endeavor. The basic gist is that you sign up and pay premiums (like you would with car or health insurance) and in exchange, if your crops are damaged by hail storms, disease, drought, fire, flooding, insect damage or any of the many natural disasters that plague farmers, you get compensated. With natural disasters increasing exponentially due to climate change, crop insurance is a critical part of many farmers’ risk management plan.
But, there’s a big, inherent flaw in crop insurance: It rests upon disaster on the farm. Farmers are paid when natural disasters hit and their crops are ruined.
Now, imagine this. What if farmers were paid to withstand whatever Mother Nature throws at them? What if crop insurance paid farmers for farming practices like no-till farming and cover-cropping, which help keep soils healthy and resilient in the face of natural disaster?
Both Iowa and Illinois have started pilot projects where the states are offering discounts to farmers who are enrolled in crop insurance programs and implement no-till farming and cover-cropping on their land. At the federal level, the Conservation and Crop Insurance Task Force, a diverse group of participants including farmers, scientists, economists, environmentalists, and policy folks, is working on the same thing but at a national scale.
As The Counter reports, there are 300 million acres of farmland enrolled in the federal program so the potential impact such a mechanism could have is significant to say the least.
The federal crop insurance program was created in the wake of the Dust Bowl disaster of the 1930s, which to farmers experiencing it, felt like the end of the world. However, as time goes on and farming practices have changed dramatically, the program needs to change as well.
When President Franklin D. Roosevelt authorized the crop insurance program and the Soil Conservation and Domestic Allotment Act, which incentivized good soil management practices such as crop rotation, he said, “[The] recurring dust storms and rivers yellow with silt are a warning that Nature’s resources will not indefinitely withstand exploitation or negligence. The only permanent protection which can be given consumers must come from conservation practiced by farmers.”
Roosevelt’s words ring true today. But, without the financial incentives to implement conservation practices, it can be very difficult to make the switch, particularly in an industry with increasingly tight margins.
What’s happening in Illinois and Iowa and what’s churning on a national level in terms of rewarding regenerative agricultural practices is hopeful. More cash in the pockets to help farm businesses do the right thing is a win-win. But, in addition to the “carrot,” to really plow under the climate change problem, political leaders may also need to explore the “stick” and create laws that require conservation practices like carbon sequestration. Hopefully the “sticks” will come with cash to help farmers implement these programs too…