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Pilot program links cover crops to insurance

Pilot program links cover crops to insurance

Farmers have shown strong interest in Iowa’s one-of-a-kind pilot program to provide a crop insurance premium discount for planting cover crops, according to Matt Lechtenberg, water quality coordinator for the Iowa Department of Agriculture and Land Stewardship (IDALS).

The department is in the process of re­­viewing applications for the program and verifying acres, Lechtenberg said last week.

Once that process is complete, IDALS will forward the list of eligible applicants to the Risk Management Agency (RMA). Farmers with qualifying cover crop acres planted last fall will receive a $5-per-acre crop insurance premium discount on their spring-planted cash crops.

All RMA-approved crop insurance providers have opted to participate in the pilot program’s initial year, Lechtenberg said.

“That premium discount will show up on your next crop insurance invoice, typically in the August/September timeframe,” he said.

Expanding acreage

The program is aimed at ex­­panding cover crop usage beyond traditional conserv­ation cost-share programs, which are often limited in funding and scope, said Lechtenberg.

“We think we have a lot more capacity to reach more folks than we have with our traditional methods with providing incentives for conservation. Nearly every operation in the state is affected by crop insurance,” he said.

Other states also have shown interest in Iowa’s unique pilot program, Lechtenberg noted.

“We’ve had several inquiries from other states. We know they’re watching to see how this works,” he said.

Cover crops are a key tool in the Iowa Nutrient Reduction Strategy, a voluntary science- and technology-based plan to reduce losses of nitrogen and phosphorus into the state’s waterways. 

Research shows that, on average, the use of cover crops such as winter rye can reduce nitrogen loss from farm fields by 31 percent and phosphorus loss by 29 percent.

“It’s one of the few practices that has a direct effect on both nitrogen and phosphorus, and it’s one of the most impactful practices we can do to address both (nutrients),” said Lechtenberg.

Working with RMA

Officials at IDALS worked with the RMA to establish the crop insurance discount under a three-year demonstration project, which helps address concerns about whether crop insurance and cover crops could work together, he said.

“We worked closely with several ag groups to help build this program,” said Lecthenberg.  

Enrollment for 2018-planted crops ended in January. There will be another enrollment opportunity this fall. It is anticipated that up to 200,000 acres could be enrolled in the first year of the three-year project. The crop insurance discount is only available on cover crop acres that aren’t covered by other state or federal programs.

“We want to avoid duplication and (enroll) acres above and beyond what we currently cost-share,” said Lechtenberg.

The crop insurance discount program is a good example of how conservation practices and incentives under the Nutrient Reduction Strategy are changing over time as new information becomes available, Lechtenberg noted.

“Certainly, the strategy when it was released almost five years ago didn’t even think about programs that were possible like (this),” he said. “To get more acres, we need to grow the pool of resources that we have. We need to be creative in ways that we address those limitations.”



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