A Win for Farmers, Waterways, and the Climate

3 February 2022
Todd Barker Deborah Atwood

The Federal Crop Insurance Program (FCIP) covers more than 370 million acres of farmland and has a significant influence on farming practices across the United States. Changes to the program can have wide-ranging implications for U.S. farming practices, making federal crop insurance a key mechanism for change in the food and agriculture system. Through the AGree Economic and Environmental Risk Coalition, Meridian works with farmers, ranchers, researchers, academics, former U.S. Department of Agriculture (USDA) officials, and NGOs to advocate for changes to the FCIP that acknowledge the risk-reducing benefits of conservation practices. Our research shows that recognizing the risk-reduction benefits of conservation practices will help make the FCIP more cost-effective and actuarially sound, while also providing important climate benefits.

This is why we are pleased to announce the Post-Application Coverage Endorsement (PACE), a new crop insurance offering from the U.S. Department of Agriculture’s (USDA) Risk Management Agency (RMA). The first-of-its-kind endorsement was developed through a collaborative effort managed by Meridian that included the Illinois Corn Growers Association, National Corn Growers Association, Ag-Analytics Technology Company, the University of Illinois, and others. PACE was developed and approved under provisions that allow for private development of new federal crop insurance products.

PACE offers coverage to farmers who split-apply nitrogen fertilizer (applying nitrogen once before planting and again later in the growing season). This practice benefits both farmers’ bottom line and the environment by supporting more efficient fertilizer use, reducing fertilizer runoff, and lowering greenhouse gas emissions. However, split nitrogen application does involve a risk that a farmer will not be able to apply fertilizer in the spring if wet weather conditions prevent farmers from accessing their fields for the second nitrogen application. The PACE endorsement insures against this risk.

PACE is an important step forward for crop insurance. It supports farmers who split apply nitrogen by reducing their input costs, preventing runoff into waterways, and decreasing greenhouse gas emissions. We are thrilled to see farmers in 11 states have the option to buy PACE in its first year and are hopeful that access will expand in coming years.

For more information about PACE, including an informational video, please visit PACEcropinsurance.com.