Two of the main struggles that farmers face in trying to make a living is having a steady cash-flow during the winter and spring (when they need to buy seeds and fertilizer) and the ever-present risk of their particular occupation—that their crops might fail or be damaged due to drought, flooding, or whatever else mother nature has in store. These difficult elements of the business force farmers to depend on banks and crop insurance agencies to help them through the dry months and absorb some of their risk.
The need for financial lending and insurance is no less for farmers who practice sustainable growing practices (meaning, in short, farming practices that incorporate more ecologically-sound methods that preserve natural resources). But recent research in Iowa shows that these farmers face hurdles when seeking loans and insurance, in part because lenders and insurance agents do not have a good understanding of sustainable agriculture. With a rapidly growing market for organic products and agricultural practices that protect against pests and disease and preserve topsoil, there appears to be a disconnect between sustainable farmers and members of the industry on which they depend. In fact, this chart shows that less than 6% of rural bankers and crop insurance agents have extensive knowledge of sustainable farming practices with which to inform the key financial decisions that would buffer sustainable farmers, and change our food system for the better.
Created by CPE Member Economists Jonathan Teller-Elsberg and Sue Holmberg
September 2011
Sources:
Bruckner, Traci and Kim Preston. August 2011. “Credit, Crop Insurance and Sustainable Agriculture in Iowa.” Center for Rural Affairs, Rural Policy Program.
http://files.cfra.org/pdf/
