Crop insurance tackles climate change


An agricultural safety net built for the Dust Bowl era is about to clash with the climate change era.

The federal crop insurance program, which pays farmers for poor or lost crops, could face some of its biggest challenges since it was passed in the 1930s, when Congress and the Department of Agriculture are looking for ways to manage the risks of floods, droughts and other weather disasters across the country.

Those risks will continue to change as the climate warms, a USDA official said last week. In California’s Central Valley, the USDA predicts that crop insurance payments from excess moisture will exceed those from drought — a pattern that could be repeated in the Pacific Northwest.

And in the East, a crop insurance program designed for agricultural belt commodities like corn and soybeans will face continued pressure to protect specialty crops vulnerable to spring frosts, hurricanes and other events that scientists believe are likely to inflict more damage in the coming decades.

“All of us in agriculture are working together to fight climate change and improve the voluntary adoption of conservation practices,” said Tom Zacharias, president of National Crop Insurance Services, a lobby group for insurers, during the last week’s annual outlook conference hosted by the USDA. At the same time, he said, policymakers must ensure the program’s financial integrity — a nod to the government’s role in subsidizing crop insurance and a legal requirement that payments over time should not exceed the premiums collected.

Crop insurance enjoys broad support in the House and Senate Agriculture Committees, with equal splits among Democrats and Republicans. But it is also under pressure to adapt to climate change, for example by giving farmers stronger incentives to plant cover crops or reduce greenhouse gas emissions.

During a panel discussion on crop insurance, Zacharias spent most of his presentation defending the program and touting the partnership between the USDA and the companies his group represents, calling it “the front line of defense” of agriculture against meteorological disasters.

Despite the program’s challenges, it’s in better shape than it was decades ago, USDA Risk Management Agency underwriter David Zanoni told the conference. Before an overhaul in the mid-1990s, the program paid out more than it collected in premiums, on average. Now, he says, “on the whole, the good years pay for the bad years.”

The discussion came as groups like the Environmental Task Force step up efforts to revamp crop insurance with a greater focus on climate change. The EWG, a long-time critic of the program’s direction, has released new analysis showing repeated crop insurance payouts to the same counties for weather disasters – a lesson the group says farmers need to change practices and that the program itself is a waste.

Mississippi Basin counties, for example, appear to be a crop insurance “hot spot,” the EWG said, receiving more than $3 billion in payments from 2001 to 2020. Among other findings, the EWG reported that 40 counties in the region received crop insurance payments for drought and “excess moisture” in the same year – for 20 consecutive years.

“The USDA crop insurance program must be reformed to encourage farmers to both adapt to the climate crisis and reduce their own emissions,” said Anne Schechinger, EWG director for the Midwest, in a statement accompanying the report. “Some of the astronomical financial cost of this program – and the climate cost of farming – could almost certainly be mitigated by better choices, such as permanently setting ecologically sensitive land out of production.”

The EWG has created a database on crop insurance website.

Globally, the United Nations Intergovernmental Panel on Climate Change noted in its latest report that crop diversity can help reduce long-term insurance payments. “In addition, there are new crop insurance schemes based on changes in weather conditions,” the final draft said. report noted.

In the United States, federal crop insurance is provided by a dozen USDA-approved companies and cost $7.9 billion for the 2020 crop year — not including premiums paid by farmers, the report said. department. The government covers, on average, about 60% of premiums, leaving 40% to farmers. The ratio varies by crop and level of coverage, as well as where it is grown, as not every crop is covered in every county.

As well as covering specific crops, the government has adjusted the scheme over the years to cover entire farms, a policy targeting farmers who experience losses in a variety of vegetables and fruits, for example. And the USDA recently added coverage for crops that experience a significant decline in quality, even if not entirely lost.

Other changes have come more slowly, including making crop insurance compatible with conservation practices like cover crops, which the researchers say stimulate the soil and sequester at least some carbon. In this situation – where farmers are planting grass, for example, to retain soil and conserve moisture during the off-season – the rules governing how the main crop is then planted have complicated the program for farmers. The result, according to a 2017 survey by the National Sustainable Agriculture Coalition, has been to discourage growers from adopting these practices (green wireSeptember 26, 2017).

The 2023 farm bill is likely to address these shortcomings, and Congress has shown its willingness to encourage conservation through crop insurance by requiring conservation farm plans as a condition of coverage. Additionally, the USDA said last year that it would pay $5 per acre to plant cover crops if it followed the practice with an insured crop. That program is continuing this year, Zanoni said at the outlook conference.

Nearly 100% of farmers in the crop insurance program have complied with the conservation requirement, Zanoni said, although some farmer groups say the mandate is not strong enough and could push for changes. changes in the agricultural bill.

Republican lawmakers have begun championing the program, including Rep. Glenn Thompson (R-Pa.), the senior member of the House Agriculture Committee. At a hearing last week, Thompson took issue with the idea of ​​changing crop insurance to make it more climate-focused.

“I think that’s looking at the problem completely the wrong way,” said Thompson, who added that he welcomes the climate change discussion. “We should rather ask ourselves what we can do to make climate policy more favorable to farmers.”


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