Resilience Deserves Coverage: Fixing What’s Broken in Crop Insurance

Federal crop insurance is one of the most powerful risk management tools in U.S. agriculture. But the way it’s structured today leaves most farms behind and undermines the resilience our food system urgently needs.

The program primarily serves large row-crop farms producing a narrow set of commodities like corn, soybeans, wheat, and cotton. These operations often span thousands of acres and are located in just a few high-production states. They also claim the lion’s share of crop insurance subsidies, more than 65% of which go to just 10% of farms by sales.

Meanwhile, small to mid-sized farms, especially those growing fruits, vegetables, or operating with diverse crop rotations, are largely uninsured. As of 2022, only 13% of U.S. farms held any crop insurance policy, and just 9% of farms under 50 acres were covered.

At first glance, this imbalance might appear to make actuarial sense. Large monoculture farms have highly consistent production data, sophisticated equipment, and the benefit of economies of scale. From a traditional underwriting standpoint, they appear low risk. But when we step back we see a very different kind of risk emerge.

Individually Stable, Systemically Fragile

While large monoculture farms may appear stable on their own, the crop insurance system becomes fragile when it relies almost entirely on them. Most insured acreage is concentrated in the Midwest, so when drought, flooding, or severe storms strike, losses cascade across the system simultaneously. Crop concentration further amplifies the risk. With so much acreage focused on a few major commodities, disease outbreaks, heat waves, or pests can impact millions of acres at once, with no buffer in the system to absorb shocks.

Smaller and more diversified farms, especially those using regenerative or conservation practices, are often better equipped to manage these risks. They rely on crop diversity, localized markets, and soil health strategies to absorb volatility and bounce back. But these same farms are also far more likely to be uninsured. The result is a brittle, overexposed system that is least protected where it is most vulnerable.

Policy Design Reinforces the Problem

The structure of the program isn’t just the result of market forces, it’s deeply embedded in policy design. Insurance agents are paid based on the value of premiums sold, which incentivizes them to work with large, uniform operations and discourages engagement with small or complex farms. Specialty crops and organic operations are often capped in how much value they can insure. Beginning farmers, or those transitioning to regenerative practices, may lack the multi-year production histories required to access affordable insurance. Even when tools like Whole-Farm Revenue Protection (WFRP) or the Noninsured Crop Disaster Assistance Program (NAP) are available, they are complex, underused, and poorly supported. This leaves many producers without any meaningful coverage.

At the same time, some of the most forward-looking practices in agriculture are penalized rather than supported. Until recently, adopting practices like cover cropping or transitioning to organic could disqualify a farmer or reduce their indemnity payments. These policies discourage the very actions that can build long-term stability into the food system.

Redefining Risk with AGRIS

At L1A, we believe resilience deserves coverage. That’s why we created the Agricultural Risk Intelligence Score, or AGRIS. AGRIS redefines how we evaluate farm and regional risk. Rather than relying solely on historical yield and acreage, it incorporates a more complete picture of vulnerability and resilience, including exposure to climate volatility, crop and income diversity, soil health, and other structural indicators. These are the factors that more accurately predict how farms will perform under stress, and how much they contribute to a resilient food system overall.

This approach allows insurers, lenders, and policymakers to make more informed decisions about where and how to extend support. Farms that invest in long-term sustainability, whether through conservation, diversification, or innovation, can finally be recognized and rewarded for reducing risk at the system level. Because resilience isn’t just good practice, it’s a lower-risk investment.

A Smarter, Fairer Safety Net

If the goal of federal crop insurance is to stabilize our food system, then it must extend to the smaller, more diversified operations that are currently excluded from the safety net despite their critical role in building resilience. The current system overprotects farms that appear stable on paper, typically large and specialized operations with history, while overlooking those changing to adapt, diversify, and reduce systemic risk. As climate shocks intensify, building resilience into agriculture will require better tools, better data, and better incentives. AGRIS is one step toward that future, a future where our safety net reflects real vulnerability, supports real adaptation, and works for the farms building a more resilient food system for everyone.

Data and Reports Consulted:

1. National Sustainable Agriculture Coalition, Uninsured: Federal Crop Insurance Program Leaves Most Farms Unprotected, March 2025.

2. NSAC, Unsustainable: State of the Farm Safety Net, February 2024.

3. USDA ERS, Specialty Crop Participation in Federal Risk Management Programs (EIB-241), September 2022.

4. USDA ERS, How Do Time and Money Affect Agricultural Insurance Uptake? (ERR-212), August 2016.

5. 2022 Census of Agriculture, USDA NASS.

6. Government Accountability Office (GAO) and CRS Reports on FCIP subsidy distribution and system performance.