Passage of a unique concept that got Congressional consideration during the writing of the 2018 Farm Bill could put more dollars in the pockets of no-tillers. It’s an idea that farmers who use no-till, cover crops and conservation-minded crop rotations to protect the soil should be rewarded with an equivalent of auto insurance’s “good driver discount” when it comes to paying crop insurance premiums.

In fact, the Izaak Walton League of America maintains farmers who utilize no-till and seed covers may be paying up to twice as much in premiums than is justified by crop insurance risks. 

Representing 10% of the lowest-risk growers, the data on these overpayments were based on soil type and the conservation measures being used.

Less Risk, Less Cost

“Farmers who adopt conservation measures that build soil health, increase the organic-matter content of the soil and increase the soil’s water-holding capacity reduce the likelihood that they will suffer a larger crop loss in a very dry or very wet year,” says Duane Hovorka, the League’s agricultural program director. 

“Yet these ‘high conservation/low risk’ farmers pay the same premiums for crop insurance as farmers who have not adopted soil health measures and are more likely to have a crop loss covered by crop insurance.”

With taxpayers footing 62% of the crop insurance bill, the League believes both farmers and taxpayers would benefit from more extensive adoption of several conservation measures. 

Backed by research data, this includes the fact that most no-tilled soils are more resilient to drought and flooding, the two categories which account for the majority of crop insurance payouts.

During preliminary work on the 2018 Farm Bill, Hovorka says the League urged lawmakers to establish a 3- to 5-year pilot program that would reward corn and soybean growers in several states who rely on no-till, covers and conservation-oriented crop rotations to protect the soil. 

While the House version of the Farm Bill passed in late June didn’t offer these incentives to build soil health, the Senate bill includes language that could permit crop insurance discounts for using precision irrigation, fertilization, crop rotation, cover crops, no-till and other appropriate practices to reduce crop risk. Whether this risk-reducing language ends up in the final 2018 Farm Bill remains to be seen.

You Should Qualify

If this concept was to become law, I’d expect many No-Till Farmer readers would easily qualify for crop insurance discounts covering yield losses.

This is due to the fact that many of you are already effectively using no-till, rotations and cover crops as soil-building practices and to boost the income from your crops.

The League proposed a 10% premium reduction for growers using each of these practices, with up to a 30% total discount. In 2016, crop insurance payments averaged about $33 per acre, or roughly $12.59 per acre for the 38% farmer-paid share. 

“For yield protection policy premiums in the range of $10 to $15 per acre, the discount we would suggest would be in the range of $1 to $4.50 per acre, depending on how many qualifying practices are put in place,” says Hovorka. 

Farmers, Public Win

In its proposal, the League chose to highlight management practices, such as no-till and cover crops, that provide major conservation benefits. They say these recommendations will help justify from a public perspective the premium discounts provided and magnify the public benefits of the incentives.

“As farmers respond to crop insurance discounts by adopting conservation practices, they should reduce expected crop insurance payout by building soil health and providing public benefits in soil conservation, along with improved water quality and wildlife habitat,” says Hovorka. 

This is why Congress should allow insurance companies to offer the equivalent of a “good driver discount” that’s linked to soil health through the use of good conservation practices.

No-Till Farmer believes lawmakers should make sure this proposal is part of both this and future Farm Bills. 

It’s a responsible way of not only encouraging no-tillers and other growers to protect the soil, but it’s a way of more effectively managing public dollars and caring for the environment.