The Soil Solution: Incentivizing Sustainable Agriculture through the Federal Crop Insurance Program by Sam McDermott

In 1937, President Franklin Delano Roosevelt sent an important reminder to governors around the U.S., stating that “the Nation that destroys its soil destroys itself.”[1] Over 80 years later, the soil that American life depends on is in crisis. Topsoil in the United States is eroding at a rate 10 times faster than it can be replenished.[2] Decreasing topsoil levels threaten the ground’s ability to store nutrients necessary for crop growth, capture carbon in the soil, and filter polluted water.[3] Climate change only exacerbates the devastation on American soils with increased frequency of droughts, floods, and severe storms.[4] Now more than ever, farmers must implement sustainable agriculture practices. To date, more than 50% America’s topsoil has already eroded away, and unless the federal government acts now to better incentivize sustainability in farming, soil erosion will continue to worsen—threatening to uproot American life completely. [5]

Sustainability is a concept which at its heart should be aligned with the interests of American farmers. In short, sustainable agriculture is a type of agriculture which maintains healthy soils, minimal greenhouse gas emissions, and proper water management.[6] Through farming more sustainably, farmers are able to better produce high yield products for years to come—helping their farms both economically and environmentally. However, when asking my uncle who lives in rural Iowa why he does not partake in many sustainable agriculture practices, he responds to me that he would love to, but he can’t afford to change his operations. His view is not the result of a lack of interest in sustainable agriculture, but instead due to operating in a government support system that prioritizes a continuation of unsustainable industrialized agriculture practices.

Industrialized agriculture practices have a significant impact on the local environment. Farmers supplement nutrients into their field’s soil in the form of fertilizer and manure which contain nitrogen and phosphorus that are crucial to the successful growth of cash crops in the United States.[7] Rainfall can cause portions of these fertilizers to wash away from the fields and pollute streams running adjacent to the cropland.[8] This pollution contaminates drinking water and causes eutrophication—an excess of nutrients in the water which leads to hypoxia (“dead zones”) and algal blooms—killing fish and other forms of aquatic life in the process.[9] One of the largest “dead zones” is in the Gulf of Mexico and approximately 66% of the nitrogen entering the gulf can be directly traced back to agriculture practices along the Mississippi River Basin.[10] Soil erosion is another environmental impact of industrialized farming and it is causing a loss of fertility and nutrients amongst the soil.[11] When fields are left without crop cover in the non-growing seasons, wind and rain erodes portions of the top layer of soil into waterways.[12] This clears important topsoil nutrients from the field while also clogging sediments into waterways lining the agricultural fields.[13]

Cover crops have been shown to be an easily implemented step towards more sustainable agriculture for industrialized farming practices. These are plants that are grown on fields during times in which the economically productive cash crops are not being grown for the purpose of boosting soil health and decreasing erosion. Environmental benefits of cover crops include decreased fertilizer use, decreased soil erosion, improved water quality, and increased biodiversity.[14] To help reduce further erosion and improve water quality, the federal government must financially support farmers who are implementing sustainable agriculture practices like cover cropping instead of subsidizing the current system causing environmental degradation. In 2017, the national cover crop adoption rate in the US of only 3.9% in 2017.[15]

One of the most promising ways in which the federal government can raise the national cover crop adoption rate is through a deduction of farm insurance premiums for farmers who use cover crops. The Federal Crop Insurance Program (FCIP) was created in the 1930s in response to the devastation on American fields during the Dust Bowl. Now a key component of the so-called “farm safety net”, crop insurance is purchased by farmers to protect their assets from a loss of crops from natural disasters (i.e. floods, hail, etc) or losses in revenue due to a decline in the price of crops.[16] This insurance program is administered by 16 pre-approved private insurance companies and heavily subsidized by the federal government with government funding accounting for 62% of all premium payments.[17] Currently, this government-backed program will financially support farmers regardless of whether they adopt sustainable agriculture practices, and there is therefore no financial incentive for farmers to change their unsustainable ways. This moral hazard is costing taxpayers who fund the FCIP with extreme weather-related claims totaling over $41 billion between 2011 and 2015.[18] This cost that will continue to rise unless sustainable agriculture practices like cover cropping are implemented—minimizing the risk of crop damage due from climate-related weather events.

Crop insurance premium deductions for farmers implementing sustainable agriculture practices is already being done at the state level. In 2017, the Iowa Department of Agriculture and Land Stewardship launched a “good farmer discount” program that would give Iowa farmers a $5 discount on their crop insurance premiums if they use cover crops—a 40% decrease in the total premium cost.[19] The program has had great success with 168,708 acres of land funded through the program in the first year alone.[20]

Going forward, the federal government should facilitate the creation “good farmer discount” programs for crop insurance premiums in other states. The reduction in premiums would essentially pay for itself through cover crops inherent ability to better protect the soil—saving money for both the farmers and insurers. Without sufficient action by the federal government to incentivize sustainable agriculture practices, American soil continue to erode—threatening the future of American farmers and the entire food supply chain.

 

Endnotes

[1] Franklin D. Roosevelt: “Letter to all State Governors on a Uniform Soil Conservation Law.,” February 26, 1937. Online by Gerhard Peters and John T. Woolley, The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=15373.

[2] Pimentel, David. “Soil Erosion: A Food and Environmental Threat.” Environment, Development and Sustainability, vol. 8, no. 1, Feb. 2006, pp. 119–37

[3] Cosier, Susan. “The World Needs Topsoil to Grow 95% of Its Food – but It’s Rapidly Disappearing.” The Guardian, 30 May 2019. www.theguardian.com, https://www.theguardian.com/us-news/2019/may/30/topsoil-farming-agriculture-food-toxic-america.

[4] Natural Resource Defense Council, “Covering Crops: How Federal Crop Insurance Program Reforms Can Reduce Costs, Empower Farmers, and Protect Natural Resources.” December 2017. https://www.nrdc.org/sites/default/files/federal-crop-insurance-program-reforms-ip.pdf

[5] Hopkinson, Jenny. “Can American Soil Be Brought Back to Life?” The Agenda. www.politico.com, September 13, 2017. https://www.politico.com/agenda/story/2017/09/13/soil-health-agriculture-trend-usda-000513.

[6] “What Is Sustainable Agriculture?” | Union of Concerned Scientists. www.ucsusa.org, April 10, 2017. https://www.ucsusa.org/resources/what-sustainable.-agriculture.

[7] US EPA, “Nutrient Pollution: The Sources and Solutions” https://www.epa.gov/nutrientpollution/sources-and-solutions-agriculture

[8] Ibid.

[9] Ibid.

[10] Jane Angelo, Mary. “Corn, Carbon, and Conservation: Rethinking U.S. Agriculture Policy in a Changing Global Environment.” 17 Geo. Mason L. Rev. 593-660, 2010.

[11] Horrigan, L., Lawrence, R. S., & Walker, P. (2002). “How sustainable agriculture can address the

environmental and human health harms of industrial agriculture.” Environmental Health Perspectives,

110(5), 445.

[12] “Erosion.” https://www.sare.org/Learning-Center/Books/Building-Soils-for-Better-Crops-3rd-Edition/Text-Version/Soil-Degradation-Erosion-Compaction-and-Contamination/Erosion.

[13] Ibid.

[14] Gabriel, J. L., et al. “The Role of Cover Crops in Irrigated Systems: Soil Salinity and Salt Leaching.” Agriculture, Ecosystems & Environment, vol. 158, Sept. 2012, pp. 200–07. ScienceDirect, doi:10.1016/j.agee.2012.06.012.

[15] 2017 National Census of Agriculture. https://www.nass.usda.gov/Publications/AgCensus/2017/index.php

[16] Shields, Dennis A. “Federal Crop Insurance: Background.” Constitutional Research Service, August 13, 2015.

[17] Ibid.

[18] Natural Resource Defense Council, “Covering Crops: How Federal Crop Insurance Program Reforms Can Reduce Costs, Empower Farmers, and Protect Natural Resources.” December 2017. https://www.nrdc.org/sites/default/files/federal-crop-insurance-program-reforms-ip.pdf

[19] Crop Insurance Discounts Available for Farmers Who Plant Cover Crops | Iowa Department of Agriculture and Land Stewardship. https://iowaagriculture.gov/news/crop-insurance-discounts-available-farmers-who-plant-cover-crops.

[20] Jordan, Erin. “Should There Be a ‘good Farmer’ Discount for Cover Crops? Iowa Demo Program Could Gather Data.” The Gazette. www.thegazette.com, November 29, 2019. https://www.thegazette.com/subject/news/government/should-there-be-a-good-farmer-discount-for-cover-crops-iowa-demo-program-could-gather-data-20191121.

One thought on “The Soil Solution: Incentivizing Sustainable Agriculture through the Federal Crop Insurance Program by Sam McDermott

  1. I enjoyed this perspective in that it takes a very focused view on soil in particular, which often gets left out in the broader discussion of agricultural policy. In your discussion, you started to touch upon some of the subsidy programs enacted by the government to encourage the adoption of sustainable farming practices. I think it is also important to understand some of the issues created by subsidy programs that end up perpetuating economic problems for farmers. As you mentioned early on, sustainable farming is not difficult to enact for lack of interest, it is rather a lack of funding preventing farmers from taking these steps. One large contributing factor is the government practice of providing large subsidies for corn farmers. In reality, the massive production of corn in the US has resulted in corn prices so low that farmers typically wouldn’t be able to support themselves. To remedy this, the government provides massive subsidies for farmers growing corn to ensure they do not go bankrupt. However, this subsidy is typically not enough to provide farmers sufficient funds for growth and expansion. This creates a cycle where struggling farmers barely scrape by while still growing the same crops, only to be propped up by government subsidies.
    Ultimately, I believe a change in these subsidies could also tie into issues of soil health. As you mentioned, a monotonous crop rotation is detrimental for soil health on a long term scale. Changing these subsidies could encourage a greater variety of crop production, which could both enable farmers to enact sustainable farming and improve soil health.

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