Are crop insurance discount programs for cover crops effective? Evidence from Iowa

Cover crops are promoted by agronomists and governments due to their on‐farm and off‐farm benefits. Incentive programs were created because high planting costs have hindered cover crop adoption in the United States. Crop insurance discount programs are novel incentives that subsidize farmers’ crop insurance premiums by $5 per acre ($12.36 ha−1) on cover cropped land. While this payment is smaller than those typically offered through the Natural Resources Conservation Service and state‐level cost‐share programs, crop insurance discount programs have the potential to reach a significant proportion of farmers who purchase crop insurance. This paper uses data from a survey of Iowa farmers to quantify whether participation in the Iowa Crop Insurance Discount Program (ICIDP) affects the area planted to cover crops. I find that 11% of the ICIDP area would not have been planted to cover crops in the absence of the program, which is similar to other programs after considering the lower payment rate.

Quality Incentives Program (EQIP), Conservation Stewardship Program (CSP), and state-level cost-share programs can help farmers overcome these financial challenges and increase cover crop use (Chami et al., 2023).Nonetheless, farmers have noted "burdensome paperwork" and "lengthy application processes" as a barrier to participate in these traditional cost-share programs (Reimer & Prokopy, 2014).To overcome these challenges, there has been a novel approach to tie incentive payments to crop insurance (Bryant & O'Connor, 2017).The United States Department of Agriculture-Risk Management Agency (USDA-RMA) estimates that 85% of the major row-crop planted area is covered by the Federal Crop Insurance Program, so connecting cover crop incentive payments through crop insurance has the potential to reach a significant number of farmers (Risk Management Agency, 2016).
Crop insurance discount programs give farmers a $5 per acre ($12.36 ha −1 ) reduction on their crop insurance premiums on cover cropped area to incentivize land stewardship.The Iowa Crop Insurance Discount Program (ICIDP) was the first such program and is administered by the Iowa Department of Agriculture and Land Stewardship (IDALS).In subsequent years, the Illinois, Indiana, and Wisconsin departments of agriculture adopted similar programs.Then in 2021, the USDA-RMA introduced nationwide the Pandemic Cover Crop Program, covering $59.5 million in premium subsidies for 12.2 million acres (4.9 million ha) of cover crops in its first year (Risk Management Agency, 2022).
The $5 per acre ($12.36 ha −1 ) payment from crop insurance discount programs is much lower than the payment rates from other programs.For example, the IDALS cover crop costshare program pays $25 per acre ($62 ha −1 ) for the first year using cover crops and $15 per acre ($37 ha −1 ) for subsequent years, while EQIP payments are higher but vary depending on factors such as the number of cover crop species planted.One question that remains is whether a $5 per acre ($12.36 ha −1 ) payment would be enough to make a difference, because acres in the Natural Resources Conservation Service (NRCS) or the IDALS cover crop cost-share program are ineligible for ICIDP.For instance, it is possible that the payment rate from ICIDP would be sufficient to keep already cover cropped farmland in cover crops but not expand to new land (Canales et al., 2024).Crop insurance discount programs could quell concerns that crop insurance is an impediment to the adoption of cover crops and other conservation practices (Arbuckle & Roesch-McNally, 2015;Connor et al., 2022;Ifft & Jodlowski, 2024).
Thus, this paper analyzes whether crop insurance discount programs are effective at increasing cover crop use.I studied the first 3 years of the ICIDP using data from a unique survey of Iowa farmers conducted in 2020.

DATA AND METHODS
An online survey was administered through Qualtrics and sent to participants via email on March 31, 2020.The questionnaire was sent to Iowa farmers by IDALS and Practical Farmers of Iowa (PFI), a longstanding nonprofit farmer organization.The survey was sent to a nonrandom sample of farmers via email lists and newsletters that included past ICIDP participants and cost-share program participants through IDALS or PFI, but respondents were not required to have participated in the ICIDP at any point.The survey was available for potential respondents until April 30, 2020.
Respondents answered questions regarding their participation in ICIDP, their experience with cover crops in general, and background information about their farm.Respondents were asked about the area of farmland that they planted to cover crops, area of farmland in ICIDP, and area of farmland in other cost-share programs for 2017, 2018, and 2019 ing 3 years of cover crop farmland allows us to explore how the make-up of subsidized and unsubsidized cover cropped areas evolved over the first few years of the ICIDP.
The results were analyzed descriptively to understand how the ICIDP fits within the cover crop landscape in Iowa.Two questions were used to analyze the effectiveness of the ICIDP in increasing cover crop acreage.First, of the land enrolled in ICIDP, how many were planted to cover crops for the first time?Second, how many additional acres did you plant to cover crops due to the savings from the crop insurance discount?This second question was used to estimate the additionality rate, that is, the proportion of ICIDP area that would not have been planted to cover crops in the absence of the program.Lastly, the cost of subsidizing each additional unit of land was calculated using the additionality rate, allowing a comparison of the ICIDP to other programs after accounting for differing payment rates.

RESULTS
Overall, 195 farmers started the survey, with 182 complete responses that were used in the analysis.The farms in this sample are 905 acres (366 ha), on average, which is much higher than Iowa's average farm size of 355 acres (144 ha) according to the 2017 Census of Agriculture (USDA-NASS, 2019).Farms rent in 47% of their farmland, on average, which is slightly less than the state average of 51% (USDA-NASS, 2019).Farmers from the sample planted cover crops on an average of 297 acres (120 ha), more than twice the 111acre (45 ha) average for cover crop users in Iowa as a whole (USDA-NASS, 2019).This was not surprising, given that the sample targeted cover crop users and due to the larger average farm size.Survey respondents were more likely than the general public to have livestock, as 38.4% and 12.8% of the sample had beef cattle and hogs or pigs, respectively, compared to 22.2% and 6.5% of farmers in the state.The higher likelihood of sample respondents having livestock may reflect complementarities between cover crops and livestock due to grazing possibilities (Plastina, Liu, Sawadgo, Miguez, & Carlson, 2018;Plastina, Liu, Sawadgo, Miguez, Carlson, & Marcillo, 2018).

Cover crop use
Figure 1 shows the respondents' planted cover cropped farmland broken down by subsidization program and the percentage of farmland that was cover cropped from 2017 to 2019.All four categories increased over the period, with the average farm planting 347 acres (140 ha) to cover crops in 2019, constituting 37% of their area operated.The average farm had 175 cover crop acres (71 ha) in the ICIDP, 143 acres (58 ha) in other cost-share programs, and 29 self-funded cover crop acres (12 ha) in 2019.Over the first 3 years of the ICIDP, the area of land planted to cover crops increased for the average farm, with more land in the ICIDP and traditional cost-share programs each year, at the expense of unsubsidized cropland.

Iowa Crop Insurance Discount Program additionality
Farmers were asked how many of their ICIDP acres were planted to cover crops for the first time and how many acres they planted only due to the program.Farmers, each year on average, had 24 acres (10 ha) in the ICIDP that they planted to cover crops for the first time, which amounts to 18% of the land in the ICIDP from the sample (Figure 2).This suggests that the ICIDP has been used as a way to increase the area planted to cover crops, despite the low payment rate.Farmers also planted 16 cover crop acres (6 ha) that they would not have in the absence of the program each year on average.The calculated additionality rate of the ICIDP is 11%, meaning 89% of ICIDP area would have been planted without the program and 11% would not have been in cover crops in the absence of the ICIDP.The additionality rate grew yearto-year, suggesting increased program effectiveness, possibly due to more farmers finding out about the program as it was around longer.
To put this additionality rate into perspective, if the 11% rate found in this study held true nationally, this would suggest that the $59.5 million in premium subsidies for the PCCP in 2021 would have led to a 1.3 million acre (526,000 ha) expansion in cover crop area in the United States.However, it is important to note that additionality rates may differ throughout the country, so one should take caution in generalizing this study's results.
Prior work has found additionality rates for cover crops to range from 54% to 98% (Fleming, 2017;Fleming et al., 2018;González Ramírez & Arbuckle, 2016;Mezzatesta et al., 2013), likely varying due to the payment rate and other program factors.So, to truly understand whether the ICIDP is cost-effective, one should not just look at the additionality rate but also consider the program payment rate.

Iowa Crop Insurance Discount Program cost-effectiveness
I estimate the effectiveness of ICIDP on a per dollar basis in comparison to other cost-share programs.While all land enrolled in the program receives the $5 per acre ($12.36 ha −1 ) payment and is included as a cost, only land that would not have been planted to cover crops in the absence of payment is included as a benefit.In essence, if farmers enroll fields in the ICIDP that they would have planted to cover crops even without payment, the public benefits such as carbon sequestration and improved water quality from the cover crops on these fields would have occurred regardless and should not be counted as due to the program.
The average farmer in our sample had 139 ICIDP acres (56 ha), for which they were paid $695 in reduced cropinsurance premiums.Since only 16 of these acres (6 ha) were additional, the cost per additional acre then amounts to $43 ($106 ha −1 ).Applying the above calculations to a recent study (Sawadgo & Plastina, 2021) on additionality in Iowa cost-share programs with an average payment rate of $26 per acre ($64 ha −1 ), the payment per additional acre equals $46 ($114 ha −1 ).In a Maryland study, the cost per additional acre is calculated as $50 ($124 ha −1 ) (Fleming et al., 2018).Keep in mind that the benefits generated by cover crops may differ by location, so these cost values should not be directly compared but are presented as a general reference point.Overall, the cost per additional unit of farmland for ICIDP is similar to other existing cover crop cost-share programs.

CONCLUSIONS
This paper analyzes the impact of the ICIDP using results from a survey of Iowa farmers.Cover crop area, cost-share area, and ICIDP area all increased from 2017 to 2019.These increases were at the expense of unsubsidized cover cropped land.About 18% of the cropland enrolled in the ICIDP was planted to cover crops for the first time, and 11% of the ICIDP area would not have been in cover crops without the program.While the additionality rate for the ICIDP is low compared to other cost-share programs, this is due to the lower payment rate.In fact, the program seems to fare well compared to other programs in terms of the cost per additional area, which is $43 per acre ($106 ha −1 ) for ICIDP.In addition to our finding that the ICIDP generates reasonable additionality, the linkage between larger cover crop area and lower crop insurance prevented planting indemnities (Won et al., 2023) also supports the existence of crop insurance discount programs.
While this analysis provides a first understanding of the potential impacts of crop insurance discount programs, it will be important to understand whether these effects endure over the course of the program's existence to promote sustained cover crop use, which will be crucial for achieving carbonsequestration goals.Furthermore, analyzing the effects of the Pandemic Cover Crop Program would provide information about other states throughout the United States.In particular, while state crop insurance discount programs cannot generally be combined with NRCS or state cost-share programs, they can be stacked with the Pandemic Cover Crop Program, meaning farmers in Iowa, Illinois, Indiana, and Wisconsin can receive $10 per acre ($24.71ha −1 ) in crop insurance premium reductions between the two programs.Additional work should be done to study whether farmers in the four states with their own crop insurance discount program exhibit higher addition-ality than in other states without their own such program.Future work should continue to study the interactions across cost-share programs, crop insurance discount programs, and novel carbon markets to recognize farmer perceptions of these programs.

C O N F L I C T O F I N T E R E S T S T A T E M E N T
The author declares no conflicts of interest.

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Crop insurance discount programs decrease farmers' crop insurance premium by $5 per acre for planting cover crops.• Uncertainty exists whether the payment offered through these programs is enough to increase cover crop area.• This paper evaluates the effectiveness of the first 3 years of the Iowa Crop Insurance Discount Program.• Farmers planted an additional 16 acres to cover crops due to the program, corresponding to 11% of program land.

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Summary of participants' cover crop usage by subsidization and year.

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Percentage of Iowa Crop Insurance Discount Program area that is new or additional.
Wendiam Sawadgo: Conceptualization; data curation; formal analysis; investigation; methodology; software; writingoriginal draft; writing-review and editing.A C K N O W L E D G M E N T S I would like to thank Lara Bryant and Wendong Zhang for their guidance in designing the survey instrument; Sarah Carlson and Matt Lechtenberg for disseminating the survey; and associate editor, Joleen Hadrich, and two anonymous reviewers for their insightful comments and suggestions.This research was supported by the Alabama Agricultural Experiment Station and the Hatch program of the National Institute of Food and Agriculture, US Department of Agriculture.