Environmental, Natural Resources, & Energy Law Blog

How The Farm Bill Could Shift American Farming To The Regenerative System

Lilian Winters

LLM Blog Fall 2023

INTRODUCTION

The current Federal Crop Insurance Program offers greater protection for monocultures than for regenerative agricultures. This approach costs the program more money and is riskier than adequately insuring regenerative agricultures. It is also much harder for regenerative agricultures to qualify for premium insurance rates or, in some cases, any insurance at all. This is a major concern for a number of reasons. How we farm is critical to the protection of future harvests and, therefore, national food security.[1] Regenerative agricultures produce food that is better for soil health and, therefore, more resilient to drought, floods, and fires.[2] Moreover, food produced on a regenerative farm is higher in nutrient density and plant immunity and, therefore, better for the people who consume it.[3]

The following post evaluates the 2018 Federal Crop Insurance Program and the consequences of its favoring of monocultures. Further, it proposes policy recommendations that would strengthen protection for regenerative agricultures. Namely, it proposes (1) an adequate assessment of performance when determining which farms qualify for premium insurance rates, (2) the adoption of premium formulas that account for the decreased cost of regenerative farming practices on the program, and (3) the expansion of the types of crops covered under the program.

BACKGROUND

In light of the Dust Bowl in the 1930s[4], Congress designed the Federal Crop Insurance Program (FCIP) in 1938[5] to insulate traditional field crops, such as wheat, corn, and soybeans, from the devastating impacts of natural disasters.[6] The current FCIP was signed in December of 2018 and is set to expire in December 2023.[7] While negotiations for the 2023 Farm Bill are ongoing, the marker bills set forth thus far fail to address many of the shortcomings of the 2018 FCIP.[8] Namely, the 2018 FCIP serves to insulate industrialized monoculture practices from a much needed shift in farming practices across the country toward regenerative agriculture.[9] The blatant bolstering of industrialized monocultures is evident in how production history is measured, the limited application of programs that encourage regenerative farming practices, and the subsidies that favor monocultures.

ANALYSIS

There are multiple obvious risks associated with monocultures especially considering the superior resiliency to drought, floods, and fires of regenerative agricultures.[10] The failure of the FCIP to mitigate the risks of monocultures is equally as obvious upon examination of what crops are covered under the FCIP and the determination of premium insurance rates.

The Crops that Qualify for Insurance

Since the FCIP was originally developed for traditional commodity crops on monoculture farms[11], it traditionally did not insure “specialty crops.”[12] Specialty crops are statutorily defined in 7 U.S.C. § 1621 as “fruits and vegetables, tree nuts, dried fruits, and horticulture and nursery crops (including floriculture).”[13] The Department of Agriculture estimates that this definition includes over 300 fruits, vegetables, tree nuts, trees, shrubs, flowering plants, herbs, spices, coffee, tea, honey, and maple syrup.[14]

Today, many “specialty crops” are covered by individual insurance plans.[15] However, others are still without insurance, including artichokes, asparagus, blackberries, boysenberries, broccoli, cantaloupes, carrots, cauliflower, celery, dates, garlic, guavas, hazelnuts, honeydews, kiwi fruit, lettuce, spinach, squash, tart cherries, and watermelons.[16] Some others are without crop-specific policies, such as cashews, chives, dates, eggplants, garlic, hazelnuts, leeks, lettuce, melons, most leafy greens, most herbs and spices, some tropical plants, and most root crops.[17] In fact, nearly half the acreage of “specialty crop[s]” in the United States is without the protection of federal crop insurance policies.[18]

Excluding these “specialty crops” discourages diversification, a proven method of increasing a farm’s resiliency to climate change and natural disasters.[19] If the government is interested in safeguarding soil health and future harvests, insuring “specialty crops” and encouraging regenerative practices like crop rotation and cover cropping are essential.[20] Absent greater protection for “specialty crops,” monocultures will continue to dominate American farms, resulting in greater dependency on taxpayers to pay for losses associated therewith.

The Determination of Premium Rates

Two of the most costly provisions of the 2018 FCIP favoring monocultures are the yield history and low-yield year exclusion provisions. Both provisions are critical to the determination of premium insurance rates. As such, the degree to which these provisions favor monocultures and disfavor regenerative agricultures directly increases the cost of operating the FCIP.

1. Yield history

The current yield history provision determines who qualifies for premium rates based on a 10-year production history of a particular crop on a particular field. Consequently, those who practice monoculture achieve this metric in 10 years and, thereafter, can qualify for premium rates. [21] By contrast, those who practice regenerative agriculture, which almost invariably includes crop rotation, must wait much longer to qualify for the same premium rates. Consider, for example, a farm that rotates between three crops. Such a farm would be required to farm at less favorable rates for three times as long as a monoculture before qualifying for the same premium rates.

2. Low-yield year exclusion

The second significant problem with how premium insurance rates are determined is the low-yield year exclusion provision. This provision allows farmers to exclude from their 10-year yield history “outlier” years, resulting in higher coverage rates than otherwise would be available.[22] Under the current program, a crop year qualifies for this yield-exclusion if the average per planted acre yield for the county is at least 50% below the average for the previous 10 consecutive crop years.[23] This allows entire communities operating on the monoculture system to collectively cash in on failing crops. Even more concerning, these so-called “outlier” years can be excluded, in some circumstances, for 15 low-yield years. As aptly put by the NRDC, this “call[s] into question just how outside the norm those years are.”[24] As it stands, farmers may exclude more years from the calculation of their yield history than the total number of years considered in determining that yield history. In effect, a farmer may be permitted to exclude 15 of the last 25 years, arguing they are “outlier[s],” selecting their best 10 years of the last 25 to justify their qualification for premium rates. Under such circumstances, monocultures with 50% more bad years than good ones could still qualify a farm for premium insurance rates.

Crop insurance is designed to protect farmers from losses associated with bad years due to natural disasters, including drought, floods, and fires. Regeneratively farmed agricultures are more resilient when confronted with such natural disasters.[25] As such, farmers implementing regenerative practices should be the ones benefiting from premium rates. Providing better insurance to the farmers who choose to practice in a manner that is more likely to cost the program more money is illogical.

Proposed Revisions

The yield history and low-yield year exclusion provisions encourage farmers to continue planting crops that fail at the taxpayers’ expense. As negotiations continue with respect to the 2023 Farm Bill, this blog proposes the following revisions for Congress to consider to mitigate this unfavorable outcome:

1. Use a more accurate assessment of performance when determining which farms qualify for premium rates.

The yield history and low-yield year exclusion provisions insulate monocultures from the risks associated with their practices. Yield history should be calculated in a manner that allows for farms practicing crop rotation to qualify for premium rates in the same amount of time as farms practicing monocultures. The qualifier for premium rate eligibility should be 10 years of collective yield history, regardless of whether crop rotation is practiced. Under such a policy revision, a farm rotating two crops would be eligible for premium rates after 10 years of collective yield history, with 5 years of yield history per crop. Because crop rotation has been determined to improve yields[26], the shortened time to qualify that crop for premium rates is reasonably warranted.

Further, the low-yield year exclusion should be revised to do what it purports – exclude “outlier[s]”. To achieve this goal, farmers should not be able to apply the exclusion to a time period of 15 years in calculating their 10-year yield history. [27] Rather, the exclusion’s use should be used sparingly, such as limiting use of the exclusion to a number that actually comports with the term “outlier,” once or twice in the past 10 years. This policy revision would halt the qualification of premium rates for farms that consistently suffer losses and result in charging higher rates to those who cost the FCIP the most money.

2. Adopt premium rate formulas that account for the decreased cost of regenerative farming practices on the program.

Congress could also implement better premium rates for those who farm in a manner that mitigates risk and decreases the likelihood of relying on the program. [28] This makes sense for the same reason car insurance companies reduce rates for good drivers. Those who depend on the program the least should not be paying the most to participate.

The NRDC has called for the FCIP to account for the mitigated risks associated with crop rotation and cover cropping. [29] Such a recommendation could practically be implemented as Congress has the existing authority to do so under section 523(d) of the Federal Crop Insurance Act which allows eligible farmers to receive premium rate reductions for genetically modified, “lower yield risk” corn.[30] Such a provision in the FCIP would encourage farmers to implement cover cropping and other regenerative farming practices, ultimately lowering the cost of the FCIP over time.[31]

3. Expand the types of crops covered under the FCIP.

Destabilization of the FCIP from risky monocultures is likely if regenerative practices, like crop rotation and cover cropping, are not encouraged en masse. To avoid this outcome, the FCIP should insure as many types of crops in the United States as possible. Moreover, farmers should be able to petition for less commonly farmed crops to be added to the list of insured crops. This policy revision would encourage diversification and, ultimately, protect the FCIP, and taxpayers, from inevitable payouts to monocultures as climate concerns and soil health worsen. Moreover, this policy revision would also encourage the widespread practice of farming more nutritious crops.

CONCLUSION

The most direct consequent of disincentivizing regenerative agriculture is a higher burden on taxpayers to subsidize payouts to monocultures.[32] Beyond the immediate and tangible cost to taxpayers from the current FCIP structure, continued protection of monocultures will directly destroy soil health and destabilize the nation’s food security. As such, the proposed policy recommendations are crucial to the upcoming 2023 FCIP as it will determine crop insurance coverage for the next five years.

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[1] Philp Lymbery, Sixty harvests left, Bloomsbury, p. 48 (2022).

[2] Regenerative Agriculture, NRDC Report, pp. 12, 14, 17.

[3] Donald R. Davis, Changes in USDA food composition data for 43 garden crops, 1950 to 1999, Journal of the American College of Nutrition, Volume 23, Issue 6 (2003); Feng Zhu et al., Join the green team: Inducers of plant immunity in the plant disease sustainable control toolbox, Journal of Advanced Research (2023).

[4] Covering crops, NRDC Issue Paper, p. 2.

[5] History of the Crop Insurance Program, United States Department of Agriculture, Risk Management Agency, retrieved from https://www.rma.usda.gov/en/About-RMA/History-of-RMA.

[6] Federal crop insurance: Specialty crops, Congressional Research Service (2019), p. 1.

[7] 2023 Farm Bill: Overview, USDA Economic Research Service, last viewed October 29, 2023, retrieved from https://www.ers.usda.gov/topics/farm-bill/2023-farm-bill/.

[8] Farm Bill 2023: Marker bill tracker, Rural Advancement Foundation International, last viewed October 29, 2023, retrieved from https://www.rafiusa.org/farm-bill-2023-landing/marker-bill-tracker/.

[9] Regenerative Agriculture, NRDC Report, p. 20 (citing Growing a Revolution Brown, Dirt to Soil. David R. Montgomery, Growing a Revolution: Bringing Our Soil Back to Life (New York: W.W. Norton & Company, 2018), https://wwnorton.com/books/9780393356090).

[10] Regenerative Agriculture, NRDC Report, pp. 12, 14, 17.

[11] Federal crop insurance: Specialty crops, Congressional Research Service (2019), p. 4.

[12] Id.

[13] 7 U.S.C. § 1621.

[14] Federal crop insurance: Specialty crops, Congressional Research Service (2019), p. 4.

[15] Federal crop insurance: Specialty crops, Congressional Research Service (2019), p. 9 [almonds, apples, avocados, bananas, blueberries, cabbage, chili peppers, various citrus fruits, coffee, cranberries, cucumbers, dry beans, dry peas, figs, fresh market beans, fresh market tomatoes, grapes, green peas, macadamia nuts, mint, mustard, nursery, olives, onions, papaya, pears, pecans, peppers, pistachios, popcorn, potatoes, processing beans, pumpkins, raisins, cherries, fresh apricots, fresh freestone peaches, fresh nectarines, peaches, plums, processing apricots, processing cling peaches, processing freestone peaches, prunes, strawberries, sweet corn, sweet potatoes, table grapes, tomatoes, other types of fruit and nut trees, and walnuts. Bee colonies are also covered].

[16] Federal crop insurance: Specialty crops, Congressional Research Service (2019), p. 9.

[17] Id.

[18] Id.

[19] Regenerative Agriculture, NRDC Report, pp. 12, 14, 17.

[20] Philp Lymbery, Sixty harvests left, Bloomsbury, p. 152 (2022).

[21] Regenerative Agriculture, NRDC Report, p. 20.

[22] Covering crops, NRDC Issue Paper, p. 3.

[23] Actual production history yield exclusion (Dec. 18, 2014), United States Department of Agriculture, Risk Management Agency, retrieved from https://www.rma.usda.gov/en/News-Room/Frequently-Asked-Questions/Actual-Production-History-Yield-Exclusion#:~:text=An%20eligible%20crop%20year%20is,previous%2010%20consecutive%20crop%20years.

[24] Id.

[25] Regenerative Agriculture, NRDC Report, pp. 12, 14, 17.

[26] Luiz Gustavo Garbelini, et al., Diversified crop rotations increase the yield and economic efficiency of grain production systems, European Journal of Agronomy, Vol. 137 (2022).

[27] Regenerative Agriculture, NRDC Report, p. 21.

[28] Regenerative Agriculture, NRDC Report, p. 20.

[29] Id.

[30] Biotech Yield Endorsement, United States Department of Agriculture, Risk Management Agency, retrieved from https://www.rma.usda.gov/en/News-Room/Frequently-Asked-Questions/Biotech-Yield-Endorsement#:~:text=Any%20approved%20insurance%20provider%20can,consideration%20by%20the%20FCIC%20Board (last visited Dec. 10, 2023, 8:07 P.M.).

[31] Regenerative Agriculture, NRDC Report, p. 20.

[32] Id.