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USDA makes conservation-minded crop insurance changes

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CROP INSURANCE CHANGES: RMA updating crop insurance policies to encourage the use of cover crops and other conservation practices.
Updating several key policies encourages the use of cover crops and other conservation practices.

USDA is making updates to crop insurance to respond to the needs of agricultural producers, including organic producers, as well as to support conservation of natural resources on agricultural land.  

In a notice Dec. 1, USDA’s Risk Management Agency is making permanent a new provision that allows producers to hay, graze or chop cover crops and still receive a full prevented planting payment. To accommodate the different farming practices across the country, RMA is also increasing flexibility related to the prevented planting “1 in 4” requirement, as well as aligning crop insurance definitions with USDA’s National Organic Program. 

“We are responsive to the needs of producers, and we are updating several key policies to encourage the use of cover crops and other conservation practices,” RMA Administrator Marcia Bunger says. “We want to provide producers tools to help mitigate and adapt to climate change as well as ensure crop insurance works well for a wide variety of producers, including organic producers.”  

In July, RMA announced producers can hay, graze, or chop cover crops for silage, haylage, or baleage at any time and still receive 100% of the prevented planting payment. Previously, cover crops could only be hayed, grazed or chopped after Nov. 1. Otherwise, the prevented planting payment was reduced by 65% if producers took those actions on the cover crop. 

RMA added this flexibility starting with the 2021 crop year as part of a broader effort to encourage producers to use cover crops, an important conservation and good farming practice. USDA explains cover crops are especially important on fields prevented from being planted because they cover ground that would otherwise be left bare, which helps reduce soil erosion, boost soil health and increase soil carbon sequestration. 

This change builds on the advanced research and identified benefits cover crops have supporting healthy soils and cropland sustainability efforts. Studies also show that cover crops provide increased corn and soybean yields, USDA explains. While results vary by region and soil type, cover crops are proven to reduce erosion, improve water quality and increase the health and productivity of the soil while building resilience to climate change. Additionally, RMA provided a premium benefit to producers who planted cover crops through the Pandemic Cover Crop Program to help producers maintain cover crop systems amid the financially challenging pandemic. 

Related: Crop insurance needs to recognize conservation practice benefits

Deborah Atwood, executive director of the AGree Economic and Environmental Risk Coalition, applauded the action by RMA to allow farmers to hay and graze their cover crops without jeopardizing their prevent plant coverage.

“Cover crops are an important climate-smart agriculture practice that can help producers reduce erosion, improve soil health, retain moisture and reduce overall risk to extreme weather events. Because of the strong bipartisan support in Congress and leadership at USDA, our country is recognizing the benefits of cover crops and continuing to remove barriers to conservation adoption in the Federal Crop Insurance Program so that we can build a system that is good for farmers and our environment,” Atwood says.

Earlier this year, AGree released a paper calling for changes to the federal crop insurance program to better incentivize on-farm conservation practices. The report notes mounting scientific evidence showing that conservation practice implementation, including cover crops, reduces crop yield risk during times of drought, heavy precipitation and flooding. Additionally, conservation practices provide multiple environmental benefits, including improved water quality and soil moisture management, carbon sequestration and habitat.

Prior to the 2018 Farm Bill, farmers faced the danger that an indemnity claim would be denied if they did not either adhere to USDA guidelines regarding cover crop termination or receive advanced approval for deviations. RMA removed the advanced approval requirement, re-issued slightly modified termination “guidelines” to clarify termination options for cover crops, and provided that cover cropping, including termination issues, could also use the good farming practices process if necessary.

Over a quarter of farmers in a recent survey expressed the belief that crop insurance is a barrier to cover crops, and 34.7% did not know whether or not crop insurance is a barrier.

Sen. Debbie Stabenow, D-Mich., chairwoman of the Senate Committee on Agriculture, Nutrition, and Forestry, and Sen. John Thune, R-S.D., a longtime member of the Senate Agriculture Committee, applauded USDA for implementing their recommendation to remove the arbitrary November 1 restriction for harvesting or grazing cover crops on prevented plant acres, which will give greater flexibility to producers in northern areas of the United States.

“With this update, USDA will encourage more cover cropping by making sure farmers don’t face a crop insurance penalty when extreme weather causes them to miss planting season. That’s going to mean healthier soils, less erosion and better capacity to capture carbon, and it’s why Senator Thune and I called for this similar approach in the Cover Crop Flexibility Act,” says Stabenow.

“I have been a staunch advocate for this common-sense change for years, and I’m glad to see USDA is implementing our recommendation to remove the November 1 restriction,” adds Thune. “It’s imperative for Congress and this administration to support producers who use cover crops by working to remove arbitrary barriers in order to ensure their success.”

Prevented planting flexibilities

For the 2020 crop year, RMA implemented a policy stating that for land to be eligible for prevented planting coverage, the acreage must meet the “1 in 4” requirement, which means the land must be planted, insured and harvested in at least one of the four most recent crop years. Now, RMA is adding flexibilities to recognize different farming practices and crops grown, as well as the availability of risk management options. 

New flexibilities allowed in order to meet the “1 in 4” requirement include: 

  • The annual regrowth for an insured perennial crop, such as alfalfa, red clover, or mint, to be considered planted.
  • Allow a crop covered by the Noninsured Crop Disaster Assistance Program (NAP) to meet the insurability requirement.
  • If crop insurance or NAP coverage was not available, allow the producer to prove the acreage was planted and harvested using good farming practices in at least two consecutive years out of the four previous years to meet the insurability requirement. 

Aligning organic terms 

RMA is revising four organic definitions to be consistent with USDA’s National Organic Program. Consistency across USDA programs is important to eliminate the potential for confusion between the various programs that USDA is committed to providing to the producers, USDA says in its release.

This change builds on other RMA efforts to expand and improve current options for organic producers. In Sept. 2021, RMA announced several updates to Whole-Farm Revenue Protection, including increasing farm operation growth limits for organic producers to the higher of $500,000 or 35% over the five-year average allowable income, and to allow a producer to report acreage as certified organic, or as acreage in transition to organic, when the producer has requested an organic certification by the acreage reporting date. In addition, RMA announced it will be offering the new Micro Farm policy through WFRP that specifically targets coverage for small, diversified farmers, including organic growers. 

Additional changes 

RMA made other changes to Common Crop Insurance Policy Basic Provisions, Area Risk Protection Insurance Regulations, Coarse Grains Crop Insurance Provisions, and other insurance provisions, which published today.  

RMA is providing an option for producers to delay measurement of farm-stored production for 180-days through the Special Provisions, similar to flexibilities already available to grain crop producers. RMA also added earlage and snaplage as an acceptable method of harvest for coarse grains. During the 2020 Derecho, many producers salvaged their damaged corn crop by harvesting as earlage or snaplage instead of grain or silage.

“By recognizing earlage and snaplage, we are providing confidence to producers that their crop is covered when a disaster changes their planned harvest method or if they choose to harvest in a manner other than reported on their acreage report,” Bunger says. 

 

TAGS: Policy
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