The Biden administration is moving toward providing a new round of payments to farmers who plant cover crops this year, extending a program created last year using coronavirus relief funding.
Marcia Bunger, the new administrator of USDA’s Risk Management Agency, said in an interview with Agri-Pulse that while a final decision hasn’t been made yet on the cover crop payments for 2022, “I personally think we're looking at moving in that direction....that will be something that we will see again.”
She said the money would likely also come from available pandemic relief funds.
USDA provided $59.4 million to farmers in 2021 on about 12 million acres of cover crops.
To be eligible for the $5-an-acre payments last year, farmers had to have crop insurance and certify the acreage with the Farm Service Agency.
Marcia Bunger
The program was modeled after popular programs in Iowa and other Midwest states that are trying to encourage farmers to adopt cover crops.
The $1.7 trillion Build Back Better plan would authorize a far more ambitious program that would pay farmers $25 an acre to plant cover crops on up to 1,000 acres a year. However, the bill has stalled in the Senate because of concerns that at least one key senator has about other aspects of the legislation. Under the proposal, landowners could qualify for an additional $5 an acre annually as an incentive to let tenants plant cover crops.
Bunger didn’t say when a new round of payments could be announced. USDA formally listed the program on its regulatory agenda for 2022, an acknowledgment that it was in the works.
Another step USDA is taking this year to promote conservation through crop insurance is a new policy endorsement that is intended to encourage farmers to use split applications of nitrogen to reduce runoff of the nutrient.
The endorsement will allow farmers to insure themselves against a reduction in yield if wet weather and poor field conditions prevent them from making the second application of fertilizer. The Post Application Cover Endorsement (PACE) will be available this year in select counties in 11 states.
Split applications can ultimately save money as well as limit runoff, said Bunger, who owns and operates a 2,000-acre farm in South Dakota. “By applying it two to three times, you're limiting the waste of just spreading it out all over the field,” she said.
The endorsement could be especially appealing to farmers this year due to the rising cost of fertilizer, even as strong commodity prices encourage farmers to protect their yields, she said.
“If corn prices stay where they're at, farmers are going to want to get the necessary nitrogen so that they realize the bushels at harvest,” she said.
PACE was developed by the Illinois Corn Growers Association, National Corn Growers Association, Ag-Analytics Technology Co. and the Meridian Institute.
In other insurance changes, RMA has eased some restrictions around prevented-planting coverage and also provided some incentives to very small farms to purchase Whole Farm Revenue Protection policies.
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RMA continues to evaluate possible changes to the highly popular Rain Index policies that allow farmers and ranchers to insure rangeland and forage against significant declines in precipitation. RMA is assessing about 1,000 comments. Any changes wouldn't take effect until 2023 at the earliest. "Hopefully by summer, we would be able to come out with more information if indeed we can do some changes to that policy," Bunger said.
A report by Sigma Risk and Agricultural Services Ltd. said the program pays out too frequently in some cases and provides too little coverage in some areas. The report recommended dropping the maximum coverage level from 90% to 80% while also adjusting the county forage values, or “county base values,” that are used to calculate indemnities.
The changes that RMA has made in prevented-planting rules deal with a “one in four” requirement that was put in place for the 2020 crop year. RMA said eligible land had to have been planted, insured and harvested in at least one of the four most recent crop years.
RMA has added some flexibilities, including by allowing annual regrowth of insured perennial crops, such as alfalfa, red clover, or mint, to qualify as planted. Additionally, crops covered by the Noninsured Crop Disaster Assistance Program (NAP) will meet the insurability requirement. If neither crop insurance nor NAP coverage is available, producers must prove the acreage was planted and harvested in at least two consecutive years of the previous four years.
Meanwhile, small operations can qualify more easily for WFRP policies under the changes RMA has made. To qualify as a Micro Farm treatment, an operation would have to have revenue of $100,000, or in the case of carryover insureds, $125,000 or less. RMA says that 85% of producers who sell locally make less than $75,000 in gross sales.
Micro Farm eligibility eliminates requirements for reporting expenses and individual commodities. Farmers also can include post-production activities, such as washing and packaging commodities, as revenue. Depending on a producer’s county, the sales closing dates for WFRP are Jan. 31, Feb. 28 or March 15.
RMA also is stepping up its efforts to educate underserved producers on crop insurance, said Bunger. RMA is offering $2 million in grants to organizations this year, building on a $1 million program that funded eight state-specific initiatives and one nationwide project last year. Applications for the 2022 funding are due March 11.
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