CFF Explores Impact of Crop Insurance Program in CA, Nationally

In an effort to understand the impacts of federal and state insurance programs on farmers ability and/or barriers to adoption of more regenerative agricultural practices, California Foodshed Funders' (CFF) members took a closer look the Crop Insurance program of the Farm Bill (Title 11) and California-based farm support programs and learned the following.

While many organizations are focused on the Conservation Program of the Farm Bill to incentivize more regenerative, organic, and ecological farming practices, only a few organizations are looking at how the Crop Insurance program can be improved to increase farmers adoption of these practices.  

For background, of the twelve funding areas of the Farm Bill, Crop Insurance (Title 11) makes up the second largest bucket of funding (8%). This is second to the Nutrition program which makes up approximately 80%. (Click here to learn more about all of the Farm Bill’s program allocations.) For the purpose of our learning, we focused on the impact of Crop Insurance:

  • A $10 billion/year program

  • Subsidizes farmers’ insurance by 62%

  • Used by more than 95% of producers on 300 million acres of farmland and rangeland in the U.S. This means that small changes in the Crop Insurance program can make dramatic impacts on the landscape

Efforts are underway to ensure that risk reducing benefits of regenerative farming practices, which are correlated to soil health, are recognized in the federally subsidized crop insurance program. For example, the bipartisan Agriculture Data Act of 2018 introduced by Senators Thune (R-SD) and Klobuchar (D-MN) aims to strengthen management of producer data so that it can be used to analyze the impacts of farming conservation practices on risk and yield. Presently, many practices such as cover cropping, plant residue (stubble) on fields, hedgerows, and inter-species plantings beyond two crops, can trigger loss of crop insurance coverage for farmers and as such, deters farmers from adopting these practices. Legislative efforts currently underway with the 2018 farm bill seek to eliminate those barriers by improving federal guidelines on conservation practices like cover crops.

In addition to this work that seeks to update USDA’s Risk Management Agency’s (RMA) thinking on said practices, new peer-reviewed research shows that healthier soils are a lower insurance risk and the practices that help build soil health should be recognized for these attributes within the program and incentivized. You can learn more about this work by reading the report titled “Crop Insurance, Credit, and Conservation” published by AGree’s Conservation and Crop Insurance Task Force that is actively engaged on many of these issues.

Since Crop Insurance is mainly utilized by large-scale commodity farmers in the Midwest, California Foodshed Funders also explored the few programs that are working for California’s specialty-crop growers. In California, the primary insurance product available to aid specialty crop farmers is Whole Farm Revenue Protection. This insurance buffers farmers from income loss and rewards plant diversification. The other program that assists farmers with crop loss is Non-Insured Crop Disaster Assistance Program (NAP), but this program only covers 55% of the value of the loss of 50% of total production.