Leopold Center for Sustainable Agriculture

A matter of perception: Disparity in credit, insurance attitudes

Back to Leopold Letter Fall 2011

Results of a recently completed survey of Iowa producers, ag lenders and crop insurance agents show a disconnect in their knowledge and understanding of sustainable and organic farming practices.

The survey was conducted by the Center for Rural Affairs in collaboration with the Iowa Farmers Union and funded by a competitive grant from the Leopold Center Policy Initiative. The purpose of the project was to understand each sector’s attitudes and knowledge to determine the extent, if any, of discrimination against sustainable agriculture in lending and crop insurance practices.

“This analysis reveals real disparities between how conventional operations and sustainable farms and ranches are treated by lenders and insurance companies,” said Traci Bruckner, assistant policy director at the Center for Rural Affairs and an author of the report.

The report recommends that the 2012 Farm Bill remove a 5 percent surcharge on insurance premiums for organic producers and provide insurance claim payments equal to the market premium for organic products. Bruckner said the current law puts organic producers at a significant disadvantage by levying the surcharge and only providing conventional crop price coverage in times of crop failure.

The report points to a need for ongoing education about sustainable agriculture for lenders and crop insurance agents as well as producers, and makes several other policy recommendations.

Back to Leopold Letter Fall 2011