Advocates of conservation practices and cover crops are looking to speed up the development of new crop insurance products by going around USDA to start testing coverage for growers who want to produce rye as a cover crop and cash crop.
The AGree Coalition is raising money from private investors and going through state insurance regulators to get the product into the field as a pilot project.
The idea, says AGree Senior Adviser Todd Barker, is to develop the data needed to accelerate the process of getting the coverage approved under the federal crop insurance system.
The product would likely just be offered in a handful of states. Kansas, Nebraska and South Dakota are possibilities as well as areas of the southern Corn Belt.
“The goal would be to get the private product into one of these two regions, build the data set, [and] build the kind of market data that shows that there’s interest from farmers, that we’ve established some of the market demand … and addressed some of the infrastructure issues,” Barker told Agri-Pulse.
The insurance coverage would be for hybrid rye, which can be used for livestock feed as well as distilling and other purposes, as opposed to cereal rye, which is popular as a cover crop. Barker notes that federal insurance already is available for cereal rye in a few areas.
A longstanding challenge to getting farmers to try new crops is the lack of crop insurance to manage their risk.
AGree has tried to fill the gap by working through USDA to get approval for new products, using authority under Section 508(h) of the Federal Crop Insurance Act. The 508(h) allows private companies and organizations to develop insurance products for USDA approval but using that process to come up with the data the department requires can take many years to complete.
AGree hopes the rye policy project will generate needed data in three to five years. “I would say we’re priming the pump for a more efficient 508 process,” Barker said.
AGree has used 508(h) to develop a couple of insurance products aimed at increasing conservation practices. One of them is on the market, the Post-Application Coverage Endorsement, or PACE, that allows corn growers to insure against yield losses when they’re unable to make a split application of fertilizer. PACE is available in Indiana, Iowa, Illinois, Kansas, Michigan, Minnesota, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin.
But another product, known as the Conservation Practice Rating Adjustment, or CPRA, is still in the 508(h) process. “We’re well beyond six years in development on this product, so that can really weigh on people, especially when you want to get something out into the hands of farmers,” said Megan Dwyer, director of conservation and nutrient stewardship for the Illinois Corn Growers Association. Illinois Corn’s charitable arm, the Zea Mays Foundation, is sponsoring the CPRA proposal.
CPRA is intended to lower premiums for producers who use cover crops. According to University of Illinois researchers, premiums could be reduced by an average 7% in counties in a four-state pilot area of Wisconsin, Illinois, Indiana and Iowa, based on six years of data, 2018 through 2023.
The data includes 2019, a year that saw widespread prevented planting claims because of spring flooding. A University of Illinois study, using USDA data from 2019, found that the use of cover crops and no-till significantly reduced the odds of prevent-plant claims.
The conservation practices tend to be used more frequently on lower productivity fields, the same areas that are normally more likely to have insurance claims because the soil is less resilient. Researchers were able to use the USDA data under a landmark agreement aimed at insuring the privacy of farmer information.
But one of the challenges getting CPRA approved by USDA is the inconsistency of national cover crop data, Dwyer said. Another challenge is that the Risk Management Agency has expressed concern that CPRA discounts would reduce returns to agents and insurance companies, she said.
The CPRA plan has support from two insurance companies, Country Financial and Rain and Hail. New insurance products need the sponsorship of companies that are USDA-approved insurance providers.
AGree hopes to have the rye product available to farmers by September 2026 at a cost of under $1 million, far less than it has cost to develop CPRA, said Barker. “We don’t want to be working on a rye product … for five or six years,” he said.
Dwyer said, “We are all in agreement that it is extremely important … that the integrity remain [in crop insurance], and so we absolutely want the data, we want the science, we need actuarial soundness. We’re just trying to maybe get to that point a little bit faster than the traditional system and pipeline.”
