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The 2018 Farm Bill acknowledges cover crops as a ‘good farming practice.’ Plus, an insurance rebate pilot program is in development for Illinois cover croppers.

Austin Keating, Associate Editor, Prairie Farmer

March 12, 2019

5 Min Read
winter wheat and cereal rye grass
COVER CROPS: Winter wheat and cereal rye grass are displayed together on a plot at the 2018 Farm Progress Show in Ames, Iowa.

Tucked deep within the farm bill passed last year is language that makes Jonathan Coppess, director of the Gardner Agriculture Policy Program at the University of Illinois, cautiously optimistic about the future of cover crops.

In a first for the insurance component of the farm bill, the 2018 version identifies cover cropping as a “good farming practice,” an important distinction for insurance.

The distinction is important when it comes to termination guidelines for cover crops. Guidelines from the Natural Resources Conservation Service in the past were strictly interpreted by the Risk Management Agency (RMA) — if a farmer missed their window to terminate their cover crop, they could lose the ability to claim insurance until they took additional steps beyond what non-cover crop farmers had to take.

In the 2011 growing year, when weather was too wet to kill cover crops on time in parts of Illinois, such stories added to farmers’ apprehension in taking up the practice.

“Since it’s now defined as a good farming practice, it should no longer impact the insurability of your commercial crop,” Coppess says.

Ryan Stockwell, a Wisconsin farmer and director of sustainable agriculture with the National Wildlife Federation, says that while RMA made a temporary fix by extending termination deadlines for cover crops years ago, the “good farming practice” distinction offers growers more confidence.

“I personally know of a lot of farmers where it was a don't ask, don't tell situation with their agent when it came to cover cropping,” Stockwell says. “We don't have to do that anymore.”

If a farmer misses termination because of inclement weather, the farm bill now allows more flexibility for what defines a local expert — the people relied on to confirm the “natural loss” required for federally backed insurance claims.

Now that cover cropping officially is a good farming practice, NRCS staff are added to the list of those who can evaluate cover crop termination to confirm natural loss. Extension agents and certified crop advisers were defined as local experts before the 2018 Farm Bill, and now also can diverge management plans slightly from NRCS guidelines.

“We don’t have to follow NRCS guidelines absolutely precisely,” northwest Indiana certified crop adviser Dan Perkins says. “As long as a farmer has asked an expert, a CCA or an Extension agent, and has gotten good information and follows through on what we recommend, if it includes delaying termination or whatever it might be, they can still receive insurance coverage.”

“This is always how it's been for putting on nitrogen,” he adds. “Now cover crops have the same flexibility."

Illinois to offer rebates
Gary Schnitkey, University of Illinois ag economist, says continuous use of cover crops is known to bring soil health to the point where the soil is more resilient in drought.

To pay off, Schnitkey says "cover crops don't have to increase yield all years. They have to increase yields in drought years. If you look at losses in Illinois, well over 50% of the losses of the premium are associated with drought years."

Insurance premiums in Iowa offer a $5 dollar per acre discount to farmers who plant cover crops as part of an effort to reduce nutrient loss to waterways, which is particularly severe in post-drought years. As that program grows in its second year past its inaugural 170,000 acres, a similar rebate program is ramping up in Illinois.

Emily Brunner, a program manager at American Farmland Trust, says the public and privately funded project will preferentially enroll acres in priority watersheds for nitrogen and phosphorus nutrient loss. The trust aims to start the program for the 2020 growing season and will, like Iowa, reward farmers with a $5 per acre rebate.

“It'll be a three-year pilot project. We'll start with 50,000 acres and ramp all the way up to 200,000 at the end, with a budget of around $2 million,” Brunner says, adding that soil and water conservation districts will receive income from each contract for their work verifying and spot-checking for cover crops.

Long view on insurance
Stockwell is involved in another developing cover crop rebate effort in Wisconsin. He says that although he likes the idea of a rebate, it doesn’t get at the root of a long-term problem he sees: As cover crop usage picks up and insurance continues to not reflect the grower’s lower-risk positions, many cover croppers could leave crop insurance.

“In the long term, for the health and stability of the crop insurance program, we need it to become much more actuarially accurate in its risk-rating process,” Stockwell says.

The 2018 Farm Bill directs the U.S. secretary of agriculture to start collecting data from the various soil health practices used by farmers, including cover cropping, to help improve the accuracy of risk rating.

Stockwell says the hope is that this data ultimately will confirm cover croppers are cheaper to insure and inform a new way of calculating insurance premiums, which currently rely mostly on two numbers: the county average yield, as well as the farmers’ average production history for each insured crop.

“With a lot of the cover croppers I work with, in drought years, their neighbor might yield 90-bushel corn or less, and they're yielding 150,” Perkins says, adding the cover croppers didn’t experience a loss that could result in an insurance claim. “They've reduced their risk, but they’re still paying the same premium.”

Stockwell adds that insurance premiums are becoming increasingly inaccurate for farmers as they grow their cover crop acreage.

“They’re going to start asking, 'Well, what am I spending my money on with crop insurance?'” he says.

Stockwell points to one metric used in calculating insurance premiums — a field’s average production, saying it hides the variation farmers feel in drought. In an example he cites, two farmers could have a 200-bushel average corn production, but a cover cropper would have a variation of 8 bushels while the other farmer would have a variation of 35 bushels.

“The cover cropper is taking care of his weather-related risks by using particular practices,” Stockwell says. “But use of average hides that, and because it hides that, it doesn't reward or encourage farmers for managing that risk.”

“Ideally, we should see that change, but it’s a process,” he adds. “It takes time to change fundamental components to crop insurance, but it is becoming clear that in order to stay an effective program, it must address accuracy in risk rating.”

About the Author(s)

Austin Keating

Associate Editor, Prairie Farmer

Austin Keating is the newest addition to the Farm Progress editorial team working as an associate editor for Prairie Farmer magazine. Austin was born and raised in Mattoon and graduated from the University of Illinois at Urbana-Champaign with a degree in journalism. Following graduation in 2016, he worked as a science writer and videographer for the university’s supercomputing center. In June 2018, Austin obtained a master’s degree from the Medill School of Journalism at Northwestern University, where he was the campus correspondent for Planet Forward and a Comer scholar.

Austin is passionate about distilling agricultural science as a service for readers and creating engaging content for viewers. During his time at UI, he won two best feature story awards from the student organization JAMS — Journalism Advertising and Media Students — as well as a best news story award.

Austin lives in Charleston. He can sometimes be found at his family’s restaurant the Alamo Steakhouse and Saloon in Mattoon, or on the Embarrass River kayaking. Austin is also a 3D printing and modeling hobbyist.

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