Agricultural lenders and crop insurers do not currently offer incentives for farmers who incorporate these practices to improve soil health because they have no research-based economic rationale for doing so, according to Frederi Viens , a professor in the Department of Statistics at Rice University. Meanwhile, he said there is ample evidence that the federal crop insurance program indirectly provides strong incentives to continue practices that are damaging to soil health.
Viens said this misalignment of incentives is a missed opportunity for all parties involved, and it’s one of the reasons he has taken the role of lead statistician on a multi-year, multi-institution research project supported by grants from the Agriculture and Food Research Initiative at the U.S. Department of Agriculture's National Institute for Food and Agriculture and from the Foundation for Food and Agriculture Research in partnership with the public advocacy nonprofit organization Land Core.
The project’s goal is to provide evidence that more sustainable practices reduce production risk while not significantly reducing overall yields — or better yet, improving them. Viens argues that with such evidence, a shift to more sustainable farming practices could be viewed as realistic by all parties.
“For the first time we are conducting a research project to demonstrate at scale how engaging in these farming ‘best practices’ can benefit farmers, insurance providers and the federal government, which provides ample farm subsidies,” Viens said, adding that the way the U.S. farming system is set up now is not sustainable for the long term.
“The problem is that if we continue with business as usual, soil health is going to continue to deteriorate, and climate change will make things even worse,” he said. “And we may get to a point where there is nothing left in the ground to grow anything. This is obviously super concerning.”
Using sophisticated statistical techniques, Viens and his fellow researchers will determine the risk-mitigation benefits and related cost savings associated with practices that improve soil health. By highlighting the economic upside of these practices, Viens said the federal crop insurance program will be able to offer better prices and pay out less in claims. Meanwhile, farm lenders can lower loan rates and/or offer improved terms to farmers adopting good soil-health practices. Viens says he expects that farmland valuation will start to systematically reflect the net positives of these practices.
Source: rice.edu
Photo Credit: istock-digitalsoul
Categories: Indiana, Crops, Government & Policy, Sustainable Agriculture