Water management challenges and potential solutions related to the U.S. federal crop insurance program

Abstract

The U.S. federal crop insurance program (FCIP), overseen by the U.S. Department of Agriculture Risk Management Agency (USDA RMA), is intended to provide economic stability to U.S. agriculture by providing indemnities to farmers to compensate for losses due to unexpected declines in crop yields, prices, or both. Crop insurance use has increased dramatically over the nearly 100 years since the start of the program, with accelerating widespread usage over the past 30 years, and currently covers approximately 74% of the total potentially insurable crop liability (USDA ERS, 2023). Given the substantial yield and price risk faced by agricultural producers, crop insurance can influence farm production and financing decisions. However, since crop insurance is focused on financial protection and economic stability, its implementation could be at odds with other societal goals, such as water conservation actions. In heavily irrigated agricultural settings, such as the U.S. High Plains aquifer, this suggests that water conservation actions must be compatible with the crop insurance program. To support this effort, we organized a Crop Insurance and Water Management Summit in January 2024 with the goal of identifying research, education, data, and policy needs that could facilitate agricultural water conservation efforts aligned with current or potentially modified crop insurance programs. The summit had 35 participants, comprising representatives of producer, feedyard, research, policy, groundwater management, and extension communities within the state of Kansas. During and after the summit, we identified 10 challenges at the intersection of crop insurance and water management. This report describes each challenge, along with potential solutions, next steps, and obstacles, to provide guidance on potential research, education, data, and policy actions that could help advance water conservation efforts.