The Michigan Department of Agriculture and Rural Development (MDARD) and its partners launch a crop insurance pilot that includes the creation of a captive insurance entity for farmers adopting regenerative practices. The NextGen Crop Insurance pilot offers premiums that reflect the lower long-term risk associated with soil health practices such as cover crops, diversified crop rotations and reduced tillage. Pricing and coverage flexibility is delivered through the pilot's captive insurance programme. MDARD says the captive entity gives farmers more control over how coverage is designed and priced, and enables them to pool resources to achieve cost savings. Participants also have the opportunity to receive a dividend after remaining enrolled for at least four years. Farmers keep their existing federal crop insurance and their current insurance agent, receiving supplemental support as they transition to regenerative practices. The department funds the pilot through a US$480,900 grant to EarthShare, the fiscal sponsor of the Resilience in Agriculture Lending and Insurance Coalition (RALIC), which leads the project. The grant also supports an assessment using data from corn and soybean growers in Huron, Saginaw and Sanilac counties to develop rates that better reflect the reduced risk associated with regenerative practices. Corn and soybean producers in Huron, Saginaw, Sanilac and Tuscola counties who use cover crops, crop rotation and no-till or low-till methods can participate in the 2027 crop year. Tina Owens, who heads RALIC, says: “The current crop insurance system is based on a 10-year look-back that does not recognise steps farmers are taking to improve soil health. NextGen Crop Insurance is the first real test of pricing that reflects changes in soil health, and it is the blueprint for how insurers, lenders and investors will price risk in the future.” Tim Boring, MDARD director, says: “Too often, crop insurance programmes do not give farmers credit for practices that improve soil health and reduce the risk of crop loss. NextGen Crop Insurance gives farmers a pricing option that reflects the work they are doing to build healthier soils and ensure a more resilient and prosperous future for Michigan agriculture.” RALIC is led by Transformational Investing in Food Systems (TIFS). Partners include the non-profit insurance provider A3, The Nature Conservancy Michigan and the Michigan Association of Conservation Districts. Aon's Agriculture Resilience Center is supporting the pilot with risk analytics, insurance design and technical expertise. RALIC plans to expand the pilot to additional states and crops as more data becomes available.
