Lessons to learn from crop insurance programmes around the world

Lessons to learn from crop insurance programmes around the world

As the Government prepare their major Agriculture Bill, which will set out the UK’s post-Brexit replacement for the Common Agricultural Policy, it has been suggested that DEFRA will consider crop insurance programmes. Crop insurance is used in some countries outside the EU to protect farmers’ incomes, but an investigation by the Soil Association suggests that most existing schemes are environmentally damaging and financially irresponsible.

The Soil Association’s report looks at examples of crop insurance models on a global scale, concluding that they: ‘have negative impacts on farm wildlife and soil health, and drive up agrichemical usage and land-use change. They have led to riskier farming practices, promoted more intensive practices and expanded the cultivation of monoculture crops. The public, rather than farmers, bear most of the financial burden of crop insurance, and farmers are likely to financially benefit from yield-loss or mismanagement. As a result, farmers are less inclined to farm in ways that might better protect them from risk.’

Honor Eldridge, Policy Officer at the Soil Association, said: “Farmers across the United States and in many other countries heavily rely on crop insurance, which has the potential to weaken environmental protection at considerable cost to taxpayers – exactly the opposite of what Michael Gove rightly wants to achieve for UK farming. All the evidence points towards riskier farming practices being employed in areas where crop insurance schemes are available, with substantial impacts on land-use change, wildlife and increased pesticide and fertiliser use. We would encourage Ministers to explore other options that can support both farmers and the environment post-Brexit.”

Key conclusions in the report include:

• Crop insurance schemes are shown to incentivise the planting of marginal and environmentally sensitive lands to maximise profit
• Higher applications of fertilisers and pesticides are evident in areas where crop insurance is implemented
• Increased levels of monocultures occur when only one specific crop is insured
• Crop insurance generates higher costs to the taxpayer than compensating farmers for unexpected crop or market failures