What is the relationship between soil organic matter and crop insurance?

This is all in the thinking stage at the moment, but the day may come when farms that can demonstrate production practices that maintain high levels of soil organic matter will be able to qualify for bonuses. reduced crop insurance.

It’s a concept currently being explored by Alberta’s crop insurance agency, the Agriculture Financial Services Corporation (AFSC). AFSC research shows, and perhaps it’s no surprise, that farms that have above-average levels of soil organic matter tend to have higher yields even in dry, stale conditions. , therefore, crop insurance payments to these farms are lower.

“We just want the industry to think about this idea,” says Stuart Chutter, product coordinator in AFSC’s innovation department. “It’s similar to the idea of ​​safe driving bonuses. Insurance premiums can be lower if you can demonstrate a safe driving history. From a crop insurance perspective, there may be an opportunity if farmers can demonstrate practices that maintain higher levels of soil organic matter to provide lower insurance premiums. And it could work the other way around. If a farm demonstrates production practices that increase the risk of soil organic matter loss, these insurance rates may be higher.

“It’s just an idea at the moment, but we want farmers to think about it and start the conversation,” says Chutter.

According to AFSC research, the figures support the idea that higher levels of soil organic matter reduce crop production risks and contribute to higher yields. Soil organic matter is not the only thing that affects on-farm production risk, but it is an area of ​​production that can be managed and “produces the best value” in terms of crop protection. crop yields.

More bushels per acre

Chutter says the AFSC research project looked at some real-life examples from 2021 involving farms with varying levels of soil organic matter. In AFSC Hazard Zone 11, an area between Edmonton and Stettler in north-central Alberta, farms were divided into two categories – those with higher levels of soil organic matter and those with will have lower levels of soil organic matter.

During the very dry 2021 growing season, farms with higher levels of soil organic matter produced an average of 8.2 bushels more canola per acre than farms with lower levels of soil organic matter. floor.

“We found similar improved production with barley in the same region,” says Chutter. “And looking at other at-risk areas in the province, the results with crop yields weren’t as dramatic, but were similar – farms with higher levels of soil organic matter had higher yields. “

And from an insurance payout perspective, the company paid farms with less soil organic matter an average of $56.20 more per acre for yield deficits than farms with higher levels. soil organic matter.

“There may be other benefits that contribute to higher yield, but one of the key attributes of organic-rich soils is the increased ability to hold moisture, which has contributed to higher yields, especially in dry growing conditions,” says Chutter.

“Reviewing our records for 2020 and 2021, more than half, or 57%, of all insurance payments were related to drought and water limitations. This is therefore an area where improving soil quality and water holding capacity could make a significant economic difference.

Chutter says AFSC research has also looked at the effects of soil organic matter on crop yields in other parts of the world.

In the U.S. Corn Belt, for example, research has shown that a 1% increase in soil organic matter carbon produced an average yield increase of 32.7 bushels per acre and reduced crop payments. 36% crop insurance.

“From this research, it’s clear that soil organic matter levels play a huge role in crop production and increasing yields, and as a risk management tool,” Chutter says.

As part of the research project, AFSC identified seven agricultural production practices that could reduce risk:

  • Diversified crop rotation
  • Reduced tillage
  • Soil organic matter
  • Early sowing date
  • Cultivate drought-resistant varieties
  • Cultivate early varieties
  • Using a grain dryer

The two practices that appeared to have the greatest effect on reducing production risk were related to increasing soil organic matter and early planting date, with improving soil organic matter being the most important. beneficial.

The AFSC is the first crop insurance company in Canada to initiate the discussion on adjusting insurance premium rates based on risk-reducing production practices.

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