CLIENT SPOTLIGHT
Nesbit Commits To Captives:
Supporting Regenerative Farming By Protecting Farmers From The Risks Of Today
Tina Owens Transformational Investing in Food Systems( TIFS).
Across the agricultural sector, farmers are rewarded for yield, which is the amount of a given crop they can grow and distribute. The agricultural credit systems of today, as well as major insurance providers, see a farmer’ s yield as the main driver of their cash flow and, therefore, the main factor in their ability to repay loans or cover insurance premiums.
But by simplifying a farm’ s stability to yield alone, these current systems overlook key factors, such as climate change and weather events, in their underwriting and risk assessments.
“ When you adopt a different practice, and it leads to a temporary drop in yield, it can actually penalize you within the existing system,” explained Tina Owens, of Transformational Investing in Food Systems( TIFS).
Although many farmers are eager to adopt practices focused on soil health and regenerative farming, they face funding challenges and penalties under the current industry financing structure. Together, Nesbit, the American Agribusiness Association( A3), and experts like Owens are on a mission to transform investing and insurance within food systems around the world. Through TIFS, Owens has established a coalition effort that is working directly with stakeholders in communities, state governments, conservation districts, NGOs, and more to provide a soil-centered crop insurance solution. This coalition works with Nesbit on the newly developed captive insurance, and it works to enroll farmers who are interested in being part of the change at both the field and the systems level.
The Payoff Of Risk-Minimizing Practices
“ TIFS is about unlocking finance and accelerating the transition to regenerative food systems worldwide,” shared Owens.“ But we’ re centered on the success of producers, nature, and their communities.” Regenerative farming practices require farms to undergo soilcentered process transformations, which are often avoided because of the upfront investment or the risk of temporarily reduced yields. But the payoff is clear and necessary.
Within recent years, insurance providers began to notice that farmers who practiced soil-centered farming had lower risk profiles than farmers who continued with more traditional commercial farming methods. In the health insurance industry, insuring nonsmokers is less risky than insuring smokers, and there’ s a major parallel with soil-centered agricultural insurance coverage.
“ There is a clear delineation in risk, and it is about the actuarial data on where risk occurs in soil management,” detailed Owens.
4 • NesbitAgencies. com