Smart Insurance Helps Farmers Face Climate Risks

Modern Crop Coverage Prepares Growers for Extreme Weather Impacts

Extreme weather caused over $20 billion in agricultural losses in the U.S. last year. To support farmers, modernizing crop insurance is now critical.

The Federal Crop Insurance Program, a public-private partnership, covered more than 50% of these disaster losses in 2024, according to the American Farm Bureau.

This program protects farms from financial risk, but it depends heavily on outdated historical data. As weather patterns shift, it limits farmers from adopting more climate-resilient strategies like water conservation or crop changes.

Private sector innovations offer smarter options. New parametric insurance models use data and predictive tools to pay farmers quickly after events like heatwaves.

For instance, Praedictus Climate Solutions and Descartes are developing insurance based on real-time weather models. These help farmers recover faster while adjusting to changing growing conditions.

Nature X is creating insurance to reduce pollution from fertilizer runoff, helping protect water bodies like the Gulf of Mexico. Such tools support both the environment and farming resilience.

Public-private partnerships are also making progress. EDF is working with Kansas farmers and using OpenET evapotranspiration data to improve insurance coverage for irrigated fields.

Meanwhile, the University of Illinois and Illinois Corn Growers Association are testing insurance rate adjustments for conservation practices like cover cropping. 

New ventures are growing too. The MBOLD Coalition backs crop insurance for winter camelina, a cover crop used for renewable fuel and soil protection. Growers Edge partners with food companies to support farmers adopting conservation plans through crop warranties.

"Crop insurance plays a critical role in supporting the financial health of U.S. farms and ranches through the ups and downs of weather conditions."

Modern insurance gives farmers flexibility to face today’s climate, protect natural resources, and strengthen rural economies.