How the Federal Crop Insurance Program should be reformed to encourage low-risk farming methods with high-reward environmental outcomes
The Federal Crop Insurance Program (FCIP) is meant to protect farmers in times of weather-related devastation -- like the 2012 drought that cost farmers $17.3 billion worth of crops, or the 2011 floods that caused $10.8 billion in crop damage. As the harsh realities of extreme weather slam the countryside, FCIP, intended to alleviate risk for farmers, actually drives the agricultural community toward riskier farming methods and creates less resilient land. Partially as a result of FCIP policies -- which cover 70 percent of the nation's total cropland -- American farming has gravitated toward brittle, loss-prone fields.
Rather than incentivizing farmers to adopt risk-mitigating farming practices, FCIP premiums are set using a formula that ignores how important healthy, regenerative farming practices -- like conservation tillage, cover cropping and improved irrigation scheduling -- are to farmers' risk management as they increasingly face the threats of drought, floods and other extreme weather events. Methods like no-till farming not only help soil retain moisture, but also limit erosion, improve soil health and increase a field's capacity to grow high-yield crops. Such methods offer farmers short-term protections against each season's catastrophic weather events, promote fertile fields into the future and benefit the environment.
NRDC recommends that FCIP launch a pilot program that reduces premium rates for farmers who apply low-risk/high-reward farming methods to reduce the risk of crop loss. Premium rate reductions offered to farmers in the pilot program would more than pay for themselves thanks to avoided indemnities created by risk-reducing farming practices -- and NRDC believes that were these practices eventually adopted by all farmers with FCIP policies, more stable farms could eventually lead to a leaner, and less relied upon, FCIP, returning the program to its originally intended model: a safety net, rather than a crutch.
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last revised 8/27/2013
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