POSITION: IPM Insurance Product Development Coordinator
STATUS: Part-time/Contractual: Approximately 10 hours/week for 25
weeks.
DATE OF
EMPLOYMENT: New position starting April, 1998.
COORDINATOR'S OVERALL RESPONSIBILITY: To recruit a core group of
IPM experts representing a broad spectrum of IPM systems to work with
a major crop insurance company and a non-profit organization to develop
insurance products that increase the acceptance of IPM systems by
farmers. The position may develop into a long term contractual
relationship.
SPECIFIC RESPONSIBILITIES:
Identify leading experts, both private and academic, who are
knowledgeable of IPM practices.
Conduct and facilitate group meetings with insurance experts to explain
the concept
of insuring IPM practices.
Encourage and work with interested experts to submit contractual
proposals to ACIC
to help develop specific insurance policies.
Evaluate these proposals and make recommendations to ACIC for
development.
QUALIFICATIONS:
* Well connected with IPM experts in academia and the private sector.
* Have a thorough knowledge of IPM practices.
* Strong abilities to work with others and to communicate orally and in
writing.
* Able to facilitate meetings.
SALARY: Contractual arrangements will be commensurate with
education and experience.
APPLICATION: Send resume to: Jim Cubie, Agriculture Conservation
Innovation Center
1400 Wilson Boulevard, Suite 1100, Arlington VA 22209-2308
Jim.Cubie@agconserv.com
FOR ADDITONAL INFORMATION: Tom Buman, Agren Inc., 312 W. 3rd
St., Carroll IA 51401, Phone: 712-792-6248 Fax:: 712-792-6175 Email:
tbagren@netins.net
BACKGROUND:
USING INSURANCE AS A TOOL TO INCREASE
INTEGRATED PEST MANAGEMENT ADOPTION RATES
Introduction:
The growing concern over the effect of agriculture on the environment
has increased the interest of researchers in developing integrated pest
management (IPM) practices. Unfortunately, although many IPM practices
have been developed, the adoption rate of these practices has been
slow. This poor adoption rate is due to several barriers; one of the most
important being risk of failure.
THE AGRICULTURAL CONSERVATION INNOVATION CENTER (ACIC)
proposes to develop and market risk management instruments to
increase the rate and level of adoption of environmentally benign,
cost-reducing IPM techniques. In developing these instruments, ACIC is
working with private insurance companies to market these policies.
Justification For Insuring IPM Practices:
Numerous studies have found that risk is a major reason that farmers are
not adopting conservation technologies such as IPM. In 1996, the National
Research Council Board on Agriculture stated, "Risk plays a large role in
a grower's decision to adopt a new pest-management system." Risk
prevents adoption even of IPM systems that farmers believe are
profitable. Farmers rely on pesticides and other agricultural inputs to
manage risk. In practice, farmers apply extra inputs for insurance rather
than testing or scouting to determine actual input needs. This
prophylactic application of pesticide is used for insurance purposes.
A 1995 USDA Economic Research Service Study, entitled "Voluntary
Incentives for Reducing Agricultural Nonpoint Source Water Pollution,"
surveyed a number of farmers to determine why they are not adopting
these win-win practices. This study found that although farmers
understand the practices, and think they cut costs, they still do not adopt
them. In probing further, the study found that with regard to IPM, "risk" is
one of the two principal reasons that best management practices are not
being used. A second recent National Academy Report, entitled
Ecologically Based Pest Management, reached similar conclusions. It
found "the interaction of economic feasibility and risk largely determines
the likelihood that an ecologically based pest management system will be
adopted or implemented by growers."
An Example-Insuring Corn Rootworm Beetle IPM Recommendations:
Today, most farmers apply a soil-based insecticide every year, for corn
after corn, not knowing if they need the insecticide. In discussions with
Midwestern entomologists, far less insecticide can be applied each year,
particularly for corn rootworm, if proper IPM practices are used. In fact,
after years of research, Midwest entomologists have concluded that the
use of soil-applied insecticide for rootworm can be eliminated on 40% to
50% of the corn after corn acres through proper scouting techniques.
Since the total acreage of continuous corn in the U.S. in 1995 was 14
million acres (AREI, 1996) scouting for corn rootworm beetles could bring
about a significant reduction of insecticide use.
Currently, university recommendations exist for scouting cornfields (corn
on corn), to determine if a rootworm insecticide will be needed the next
year. Scouting for corn rootworm beetles is done in July and/or August.
At that time, a crop consultant can determine the level of beetle
infestation and will make a recommendation to "treat" or "not treat" the
following spring for corn rootworm.
When using proper IPM techniques, most Midwest entomologists
calculate that if a recommendation to "not treat" is made, there is less that
a 5% probability that rootworm damage will occur next year. Therefore,
it seems that a recommendation to "not treat", based on proper scouting
techniques, has little risk. In spite of the low risk, however, farmers and
consultants are not adopting this practice.
Solution:
To encourage the adoption of this practice, the Agricultural Conservation
Innovation Center (ACIC) has developed an insurance policy that will
insure producers they will not have rootworm damage if they follow set
IPM recommendations when scouting for corn rootworm beetles. A
private agricultural insurance company has estimated the insurance
policy for this scenario to cost about $3 to $4 per acre. A farmer could
save up to $11 per acre if insecticide is not used. (This assumes that
the farmer is spending $15 per acre on insecticide costs for rootworm
purposes.) The following is the initial plan on how ACIC proposes to
implement a risk insurance program for corn rootworm.
Basic Outline of the Policy:
Step #1: Certified Crop Advisor (CCA), or another accredited
professional, scouts the cornfield in July/August to determine infestation
of corn rootworm beetles.
Step #2: The CCA will make a recommendation to the farmer to either
"treat" or "not treat". If the recommendation is to "treat", the farmers will
most likely use a soil-applied insecticide while planting next year's corn
crop. If the recommendation is to "not treat", then the farmer will need to
decide whether to use a soil applied insecticide "just in case" or to use
no treatment at all. Obviously, it is our hope that the farmer will choose
not to treat.
Step #3: If the farmer decides to "not treat" he/she needs to decide:
* if they are willing to accept the risk of failure and not buy an insurance
policy.
* if they are unwilling to accept the risk of failure and buy an insurance
policy
Step #4: The farmer (or their CCA) is responsible for detecting the
rootworm damage. Usually rootworm damage will show up by the first
week or two in July. If the farmer (or CCA) feels there is rootworm
damage, they call a third party adjuster to determine the level of damage.
Step #5: The third party adjuster will determine the level of damage by a
pre-set protocol.
By providing this insurance policy, ACIC expects to expand the use of
corn rootworm beetle scouting into the entire cornbelt. ACIC also
believes that crop consultants can use this policy to guarantee their
rootworm beetle scouting program.
Conclusion:
Whether real or perceived, the risk of losing profit by implementing IPM
techniques is a major barrier in a farmer's decision process to adopt
these practices. Farmers have come to rely on agri-chemicals and
fertilizers to reduce risk, and many are loathe to reduce those inputs
even if scientific evidence shows they are unneeded. Farmers need
assurance, in the form of dollar insurance, that the occasional failure of
a lower-input agricultural system will not cause significant loss of
income.
The Agricultural Conservation Innovation Center (ACIC) has an
agreement with a major private insurance company to develop these IPM
risk management instruments throughout the United States. It is ACIC's
belief that these instruments should provide a powerful incentive for
farmers to adopt these new "win-win" technologies.
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