The Michigan Department of Agriculture and Rural Development (MDARD) and its partners today announced a groundbreaking NextGen Crop Insurance pilot that gives farmers greater choice and flexibility in their coverage options when they implement regenerative practices that improve soil health.
“Too often, crop insurance programs don’t give farmers credit for practices that improve soil health and reduce the risk of crop loss,” said MDARD Director Tim Boring. “NextGen Crop Insurance gives farmers a pricing option that reflects the work they’re doing to build healthier soils and ensure a more resilient and prosperous future for Michigan agriculture. If auto insurance companies can offer drivers safe driving discounts, shouldn’t crop insurance offer farmers safe farming discounts?”
Research shows that using cover crops, diversifying crop rotations, reducing tillage and other practices that boost soil health can improve farm resiliency and profitability over time. Unlike traditional crop insurance, the NextGen pilot offers premiums that reflect the lower long-term risk associated with these practices.
“The current crop insurance system is based on a 10-year look-back that doesn’t recognize steps farmers are taking to improve soil health,” said Tina Owens, who heads the Resilience in Agriculture Lending and Insurance Coalition (RALIC) that is leading the NextGen pilot. “NextGen Crop Insurance is the first real test of pricing that reflects changes in soil health, and it’s the blueprint for how insurers, lenders and investors will price risk in the future.”
NextGen Crop Insurance was developed to benefit farmers by:
- Granting greater choice and flexibility in pricing and coverage options through the pilot’s captive insurance program.
- Creating the opportunity to receive a dividend after remaining enrolled in the program for at least four years.
- Potentially lowering insurance premiums when soil health practices reduce the risk of crop loss.
- Enabling farmers to keep their existing federal crop insurance and their current insurance agent, while receiving supplemental support as they transition to regenerative practices that improve soil health.
Source : michigan.gov