Organic Farming Is Going to Save You Money

You’re paying to insure crops right now, so why not pay to insure the hardiest possible crops?

There's a long-standing assumption that organic farmers are agriculture's big risk takers. Not using the heavy pesticides and fertilizers is like tight-rope walking without a net, or so crop insurers seemed to believe, and they charged organic farmers a surcharge on their insurance.

But according to Jeff Schahczenski, agricultural policy and funding research director of the non-profit National Center for Appropriate Technology, no one's really ever tested whether this assumption actually reflects reality.

That's why Schahczenski is so excited that the USDA just approved a $750,000, four-year study on whether organic farming is actually riskier than non-organic farming, by looking at comparable farms, both organic and nonorganic, historical and now, and seeing which ones make more claims, and thus which ones are riskier. The NCAT will conduct the study in the name of both sustainability, and fiscal responsibility with your money in fact.

You probably don't realize it—I sure didn't—but if you're an American, you're subsidizing monocultural farming practices by helping to pay farmer's insurance premiums on their crops. "All crop insurance is subsidized to some extent," Schahczenski told me. "The average in the US is about 60 percent of the premium cost, but it varies in the coverage that you select... It's a significant public investment, subsidizing crop insurance."

It's a significant public investment, subsidizing crop insurance.

The big commodity crops—corn, soybeans, etc.—are insured in a couple of ways. Some protect from dips in the price of the crop on the marketplace, some just insure against lower yields of the crop compared to years past. But in either case, the individual crop is insured.

"The person who's growing field corn in Iowa, the insurance is so good, they can keep growing field corn forever, and why would they ever stop when they have such great, taxpayer-subsidized insurance?" Schahczenski said. "The organic grower has to be more diversified by nature and therefore can't get these insurance policies because they'd have to buy individual policies for every crop, and insurance might not be available."

Schahczenski explained, farmers who don't rely on synthetic pesticides, synthetic fertilizers, or transgenic crops, instead rely on things like timing their planting correctly and—most importantly for this study—a diverse selection of crops to weather the perils of farming. Once you deviate from the major commodity crops, though, into what the industry considers "specialty crops," insurance plans are less available, with higher deductibles.

"I work in Montana; there are organic farmers growing different things out here, and the upcomers tend to have a lot more diversity in what they grow," he said. "It's kind of inherent in the nature of the system. Their way to address the perils of agriculture is to diversify their systems of production. So if you think about 'don't put all your eggs in one basket' they may be inherently less risky because they're diversified and that diversification itself might be part of their risk management."

Growing many crops, or integrating livestock into the same system may or may not be less risky, but it's pretty apparent that the practice of growing only one or two crops on a farm is harder on the environment.

As the Union for Concerned Scientists website explains:

Monoculture farming relies heavily on chemical inputs such as synthetic fertilizers and pesticides. The fertilizers are needed because growing the same plant (and nothing else) in the same place year after year quickly depletes the nutrients that the plant relies on, and these nutrients have to be replenished somehow. The pesticides are needed because monoculture fields are highly attractive to certain weeds and insect pests....Intensive monoculture depletes soil and leaves it vulnerable to erosion. Chemical fertilizer runoff and CAFO wastes add to global warming emissions and create oxygen-deprived 'dead zones' at the mouths of major waterways. Herbicides and insecticides harm wildlife and can pose human health risks as well. Biodiversity in and near monoculture fields takes a hit, as populations of birds and beneficial insects decline.

So that's something to be avoided. But it's easy to see why the most popular insurance schemes, which are designed for single crops, abhor diversity, and weren't a viable option for organic farmers who rely on lots of different crops, in rotation, to keep both pests and weeds down and the soil nutrient rich.

The better method for organic farmers is the less well-known and not-yet nationally available "whole farm revenue insurance." Farmers grow whatever they want, and are insured for the revenue of the whole farm, not just the yield or revenue of a specific crop.

"That product had been around, not in every state, but in a lot," Schahczenski explained. "And that was really good for diversified organic farmers if you think about it, because if you've been growing organically for the last few years, the price of organic is reflected in your revenue and therefore you're protecting your revenue at its organic value."

If Schahczenski finds that diversity is the key to organic farms being less risky, he's interested in getting crop insurers, who are subsidized by US taxpayers anyway, to create incentives for more sustainable, if not necessarily organic, diverse farms. "A whole farm approach inherently promotes diversity. It doesn't promote monocultures or bicultures; it's more sustainable."

"Or to put it a different way: if we wanted to save public money—and who doesn't these days?—and reduce the public costs of crop insurance subsidization, encouraging diversity might lower the risk for everybody and then we'll have to pay less out in subsidies," Schahczenski said. "Don't we want to go the more resilient, sustainable agriculture system that exposes itself less?"

We're four years off from having a better idea or which method that actually is.