Linking Crop Insurance To Soil Health

Crop insurance coverage helps farmers when crop yields are adversely impacted by weather or other factors. However, the federal program is based on year-to-year production, without factoring in the health and quality of the soil. Many farmers would probably agree that the program discourages growers from trying to improve soil health.

Joshua Woodard is an associate professor of agriculture business and finance at Cornell University. He is working on how to tie crop insurance rates to soil quality, which could entice more farmers into conservation practices.

"Cover crops, no-till, post-apply nitrogen and crop rotations, this stuff seems really basic. All of these things are not captured well in the current program. So, we’ve done some research to show that for certain practices, you should actually be getting a higher APH and a lower rate if you’ve been doing these things," says Woodard. "And so, that’s sort of the jist of it, quantifying that and embedding that into the actual rates."

He says research data shows that these practices are beneficial, but insurance companies require a level of detail to see the correlation. In addition, rates would have to be actuarily fair and would vary in different regions of the country.

"We’re finding in the preliminary stuff we’ve done that there’s different impacts in different areas depending on what types of soils you’re on, etc. You don’t have to do all four," he says. "Let’s say you’re doing two of the four and you’ve been doing them for four years, or you’re doing three of the four for eight years. Your discount will be reflective of your area and how long you’ve been doing which practices."