The Three “C’s”: Crop Insurance, Climate, and Conservation
Over the past several years, farmers have dealt with immense climate and weather-related challenges. America’s farmers have survived droughts, hurricanes, derechos, floods, fires and a global pandemic. Through it all, farmers have kept farming. One constant throughout these past several years has been the availability of Federal crop insurance.
Recently, the Crop Insurance Coalition, a group representing farmers, lenders, agricultural input providers and conservation groups, sent letters to the Biden Administration and other congressional leaders asking them not to propose cuts to crop insurance in the upcoming FY2023 budget.
“Crop insurance [is] a farmer’s first line of defense against climate change and other disasters. As the challenges for America’s farmers and ranchers continue to grow, we believe crop insurance as a safety net is only becoming more important to stability in rural America…It is no accident that the most recent farm bills emphasized risk management, and in doing so, protected the interests of American taxpayers.”
Those familiar with the development of Federal crop insurance will recall that 1995 was the first year of implementation of the Crop Insurance Reform Act of 1994. The 1994 Act was in response to the extreme flooding and excessive moisture conditions occurring in the Midwest. Since the inception of the Act, acres insured have essentially doubled while coverage has increased more than five times.
Crop insurance is available nation-wide, and protection is provided for all eligible farmers. Accordingly, crop insurance has provided support to farmers that experienced losses due to a variety of adverse events across the country. Prominent examples since the 1993 flooding include:
- 2011 extreme drought in the Southern Plains coupled with flooding along the Missouri River
- 2012 drought
- 2019 excessive moisture conditions resulting in farmer prevented planting losses
- 2020 Midwest derecho
- Hurricane losses in the Southeast in 2020
- Drought in the Northern Plains in 2021
It is important to point out that as farmers with crop insurance have been financially protected from these weather events, the crop insurance program has operated well within its statutorily required actuarial soundness mandate. Since 1995, crop insurance premiums have exceeded indemnities.
Crop insurance’s mission is about more than the number of catastrophic weather events and dollars going out the door. It’s personal. Family farmers depend on crop insurance to maintain their way of life and support the local agricultural economy. For many rural towns, a healthy and resilient agricultural economy is also vital to their economic success.
Critics of the Federal crop insurance program have stated that the program does not encourage or require farmers to adapt to climate change. Such criticism ignores the evolution of the program to accommodate the integration of conservation programs and farmer initiatives to incorporate climate smart farming practices.
The guidelines for program participation, based on good farming practices, have evolved over time. Since 2014, farmers have been required to report their conservation plans in order to be eligible for crop insurance. In the 2018 Farm Bill, the use of cover crops was incorporated into the portfolio of good farming practices.
In a study published in 2020 in the Journal of Environmental Management, the authors report that crop insurance and conservation practices serve unique roles and are used simultaneously. Further, they report that the crop insurance program is not a barrier to the adoption of conservation practices such as cover crops and conservation tillage among Midwest farmers.
According to the study, “…results suggest that resiliency for Midwest operations includes both crop insurance and conservation practices. Neither behavior was found to inhibit the other. On the contrary, corn producers experienced complimentary outcomes from a combined approach that was greater than participation in either behavior by itself.”
To state that the modern-day crop insurance program does not support farmers’ efforts to adapt to climate change or reduce greenhouse gas emissions is simply not true.
The Federal crop insurance program has demonstrated the flexibility to accommodate change. These changes have been, and will continue to be, science based, data driven, and provide incentives for voluntary participation by farmers.