Crop insurance access lags in Iowa, Nebraska, study says

Access to insurance for crops other than corn and soybeans in Iowa and Nebraska is lagging, a new report finds.

While crop insurance options for corn, soybeans and even wheat are solid in Nebraska and Iowa, farmers who want to diversify with specialty crops often don't understand insurance options. (Erin Ehnle Brown / Grand Vale Creative LLC)

Corn and soybeans dominate crop production in Iowa and Nebraska, and access to federal crop insurance for both crops is good in the two states. But access to insurance for other crops is lagging, a new study finds.

"Diversification can be another important strategy for mitigating risk. But, lack of access to reliable crop insurance is one reason many farmers avoid incorporating additional crops (ones other than corn and soybeans) into their operation," Anna Johnson said.

Johnson, who talked with Agweek, is policy manager for the Center for Rural Affairs and author of the report, "Crop Insurance: Taking a Look at Access in Iowa and Nebraska."

The Center for Rural Affairs, which is based in Lyons, Neb., and also has a presence in Iowa, describes itself "as a private, non-profit organization working to strengthen small businesses, family farms and ranches, and rural communities through action-oriented programs addressing social, economic and environmental issues."

According to the report: In 2017, corn and soybeans accounted for 97.7% of the value of crop production in Iowa and 90% of the value of crop production in Nebraska. Crop insurance is "widely available" for corn and soybeans, as well as wheat, another common crop in the Midwest.


But insurance for other crops is limited, making diversification into those other crops — a goal that the Center for Rural Affairs supports — more difficult, the report found.

The Whole Farm Revenue Protection, or WFRP, crop insurance product is supposed to address protection for other crops. Launched in 2015, the WFRP offers insurance to cover the revenue of an entire farming operation, rather than covering yield or revenue of a specific crop. Working with a crop insurance agent, a farmer can purchase a policy that covers between 50% to 85% of revenue loss — effectively providing coverage for a wider range of crops and livestock, the report noted.

"It (WFRP) creates a pathway if you're interested in further diversifying to have some risk protection for those additional crops," Johnson said.

But farmers who haven't used crop insurance can be reluctant to use it, the report said. It found several reasons for that, including the belief that being diversified was sufficient risk management and that figuring out insurance for the first time, particularity bookkeeping associated with it, isn't a priority with other demands on their time.

"Unsurprisingly, folks who are not currently using crop insurance don't have a whole lot of understanding of how it works," Johnson said.

Also, some crop insurance agents aren't particularly knowledgeable about the Whole Farm Revenue Protection, further complicating efforts for new-to-the-program farmers to tap it, she said, adding that the insurance product is available in every state.

WFRP can be combined with existing corn and soybean insurance, which would help farmers who grow those two crops now but are interested in diversifying into other crops, including vegetables and fruit, she said.

The crop insurance product also can be used to insure livestock. which is another advantage, Johnson said


There are two different "farmer audiences" for information on WFRP, Johnson.

The first is farmers already using crop insurance who have an existing relationship with an agent and at least some understanding of the process.

The second is farmers who aren't using crop insurance now. For these farmers, "Dipping your toe into crop insurance can feel like another big project to take on," Johnson said.

Now, between planting and harvest, can be a good time to check out crop insurance agents and to start figuring out the recordkeeping that will be required, she said.

Johnson plans to do further research on the topic that will allow her to tell real-life stories about farmers who have used Whole Farm Revenue Protection, the challenges if brings and the benefits it offers.

To see the report: .

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