CLIENT SPOTLIGHT
“ Farmers who practice cover crops, crop rotation, and no-and low-till for a minimum of three years have higher and more stable yields.” Not only do soil-centered farms lead to better water penetration and a long list of climate benefits, but they are 80 % more likely to be more profitable than their peers that don’ t. 1, 2, 3
Captives: Refreshing The Insurance Ecosystem
As Owens looked at major blockages with leaders in the regenerative movement and across the agricultural industry, insurance kept coming to the forefront.“ A lot of people are relying on public policy, the farm bill, and the subsidized system … there are choices outside of that which helps demonstrate the value of risk-minimizing practices that can be implemented on farms starting now,” she said.
One of those solutions is captive insurance models. Captives are owner-controlled insurance companies that allow farmers to insure themselves against certain risks. When captives perform well, the farmers take part in the profits, and if things go wrong, farms have coverage that cannot be taken away by a third-party provider.
“ Thanks to the leaders at Nesbit and American Agribusiness Association, the captive itself allows farmers to participate almost as co-investors,” said Owens.“ Through funding from a state department of agriculture, we have covered the cost of setting up the captive. This allows a unique opportunity for farmers who remain in the captive after year four, where the intention is to offer the farmer a dividend.” Not only is the farmer expected to experience a drop in the cost of their crop insurance as soon as they enter, but there are benefits to the farmer in remaining in the captive structure long term.
This arrangement gives farmers the cushion to step into soil-centered farming practices without risking their insurance coverage. Captives teach the industry important lessons:
1. Captives demonstrate the actuarial data that will eventually help to reduce the taxpayer burden in future iterations of the Farm Bill crop insurance offerings( i. e., 2030 and beyond).
2. Investors learn from risk and return data in insurance, which helps shift their thinking about what their expectations should be across all their agricultural holdings and food investments( i. e., if they have food and ag stock holdings).
3. Most recently, captives were offered by large food conglomerates, covering specific crops vital to their supply chains or new, innovative biofuel crops. By allowing farmers to opt in when it’ s right for them for their soil-health transition, wellstructured captives will cover their full crop rotation and give them the time to explore the value of regenerative practices.
4. The first iteration of the captive covers corn and soy in crop year 2027, with the intention of adding wheat, dry edible beans, and other rotational crops as soon as possible in subsequent crop years.
Moving Forward With Nesbit
The captive pilot program underway is a coalition effort— one that TIFS has been instrumental in making possible. By determining the strategy and locations for farmer development, convening the right partners, and structuring a captive that works for farmers on the ground, TIFS has helped to create the conditions for something much larger to take shape. The pilot covers four counties with two-thirds majority corn and soy production, with the goal of demonstrating scalability and ensuring that each county’ s federal regulatory process aligns with coverage options.
That foundation is now opening new doors.
Together, TIFS, Nesbit, A3, and their state and industry partners are working to make captive structures available in any US state— unlocking a new approach to agricultural insurance nationwide. +
REFERENCE 1.“ Economics of Soil Health Evaluated on 100 Farms by the Soil Health Institute and Cargill.” Soil Health Institute. https:// soilhealthinstitute. org / newsevents / economics-of-soil-health-evaluated-on- 100-farms-by-the-soil-health-institute-and-cargill /. Mar. 9, 2021.
2.“ Regenerative agriculture: merging farming and natural resource conservation profitably.” PeerJ. https:// peerj. com / articles / 4428 /. Feb. 26, 2018.
3.“ Diversified crop rotations mitigate agricultural losses from dry weather.” CABI Digital Library. https:// www. cabidigitallibrary. org / doi / 10.31220 / agriRxiv. 2024.00244. Apr. 19, 2024.
ADDITIONAL BACKGROUND REFERENCES: https:// a3assn. com / programs / what-is-a-captive /
https:// www. tifsinitiative. org / ralic /
https:// time. com / article / 2026 / 05 / 10 / drought-US-farmers-crops-climate-change /
https:// www. farmers. gov / conservation / soil-health
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