AgFunder News: Should ag lenders and crop insurers offer ‘good soil discounts’ to farmers?
Land Core develops ‘actuarially sound model’ to make it possible
Originally published by AgFunder News, August 4, 2023 – Elaine Watson
Insurers offer discounts for avoiding smoking and good driving because these practices are proven to mitigate risk and save them money. So should insurers and agricultural lenders offer farmers that look after their soil a ‘good soil discount’?
While it’s generally understood that cover cropping, reduced tillage, and crop rotations benefit soil, these practices are by no means ubiquitous, not least because there are high upfront costs, the benefits don’t come overnight, and there are no immediate financial incentives, says soil health nonprofit Land Core.
Insurers and lenders, meanwhile, do not currently offer discounts for farmers engaging in such practices because their specific impacts at the field level, especially on crop yields, have not been quantified, it says. Until now.