Senate Farm Bill Proposal's Key Climate Provisions for Crop Insurance

As relentless droughts parch the Midwest and unpredictable floods wash through the Southern plains, American farmers are confronting the harsh realities of climate change on a daily basis. These environmental challenges are not just abstract statistics; they represent a pressing threat to our nation’s food security and the livelihoods of our farmers and rural communities. 

With the current five-year authorization of the Farm Bill (already extended once and set to expire again) in September 2024, the latest proposals from the House and Senate Agriculture Committees highlight starkly different visions for the future of farming in America. This blog delves into these proposals, focusing on a critical component given its implications on climate resilience: the integration of soil health and crop insurance, which could serve as a lifeline for farmers navigating these turbulent times. 

The Federal Crop Insurance Program 

The Federal Crop Insurance Program, managed by the U.S. Department of Agriculture (USDA) is the largest farm subsidy program, receiving about 9% of overall Farm Bill spending. While the program is intended to manage risk, it could be better prepared for the increasing weather-related risk from climate change. As the cost of weather-related indemnities (crop losses and payouts) rises, so has the program’s taxpayer-funded cost. But there is a straightforward solution: create incentives for risk-mitigating soil health practices within crop insurance. 

Soil health improvements through cover crops have been shown to reduce crop losses in drought years and reduce instances of prevented planting (the failure to plant a crop due to weather, often flooding, during the planting season). Practices like cover crops can actually lower the cost of the crop insurance program over time if enough farmers adopt the practice. Unfortunately, cover crop adoption is less than 5% across the nation, despite increased use of the practice in the last decade. Offering farmers who plant cover crops savings on their crop insurance bills will offset their costs and make it easier for farmers to adopt the practice. According to an NWF poll, this approach is favored by 78% of row crop farmers. 

Crop Insurance Provisions in Senate and House Proposals 

NRDC supported the COVER Act of 2023, a Farm Bill proposal that builds on programs enacted with bipartisan support in four states and extends a popular but expired federal program that offered farmers a $5 per acre savings off their crop insurance bills. While the COVER Act is not included in the House Farm Bill draft or fully included in the Senate proposal, some of its key provisions are included in the Senate proposal. 

• Sec 11208 of the proposal is the most significant step toward rewarding farmers for their soil health practices. The provision establishes federal matching of state cover crop payments made through a partnership with the Federal Crop Insurance Program at up to $5 per acre. Currently, the states of Iowa, Illinois, Indiana, and Wisconsin offer such programs; federal matching funds would allow these states to significantly expand the dollar amount awarded to farmers and help boost cover crop adoption in those states. While this provision doesn’t go as far as COVER Act, which would offer $5 per acre in any state, whether there is an existing program or not, it is a huge win for farmers in the states that already have programs and could spur additional states to start their own programs. 
• Sec. 11103 of the Senate proposal expands performance-based discounts for crop insurance premiums, already authorized by the Federal Crop Insurance Program, by directing USDA to consider offering discounts for precision irrigation or fertilization, crop rotations, and cover crops, and requires USDA to annually seek expert opinion and consider additional practices based on new evidence. This is significant because it names specific practices for USDA to consider and establishes a Congressional directive for USDA. USDA’s Risk Management Agency (RMA), which oversees the Federal Crop Insurance Program, has already taken significant steps toward evaluating performance-based discounts by collecting data on the actuarial impact of cover crops; this directive would allow RMA to expand on their current work and offer performance-based discounts that pay for themselves in reduced indemnities over time. 

The Senate proposal also includes other noteworthy improvements, including: a provision that farmers who use cover crops will not be penalized through crop insurance; improvements to Whole Farm Insurance, an important program for diversified farms who benefit less from traditional crop insurance; and expansion of specialty crop insurance policies. 

The House Farm Bill proposal misses the mark by failing to include these improvements to crop insurance, so it will be essential to continue advocating for the inclusion of these crucial climate provisions in the Senate bill and during any conferencing of the two versions as a final bill is created.