Farmers say crop insurance falls short

Justin Rich's Burnt Rock Farm lost $200,000 last year, after floods covered entire fields on his riverside land in Huntington with water and debris.

After paying his premiums to the federal government's Noninsured Disaster Assistance Program, Rich received his payout. It was roughly $3,000 — less than two cents for every lost dollar.

"It doesn't work terribly well on smaller, medium-scale, diversified farms like ours," Rich said of the program.

The Noninsured Disaster Assistance Program is intended to provide recourse for farmers who don't qualify for federal subsidies on insurance premiums for major crops such as corn, soybeans and apples. The program is not administered by a private provider like subsidized plans are; it's a coverage service from the federal government itself.

For many farms in Vermont, a lack of access to subsidies and the small scale of their operations limit coverage options. Significant premiums and federal bureaucracy make many question whether the remaining choices are worthwhile. But as weather grows less predictable, the unchecked costs of crop disasters threaten the viability of farming in the state.

Vermont growers whose crops qualify for traditional federal subsidies often find them helpful. Andrea Darrow, an owner of Green Mountain Orchards in Putney, said the federal apple subsidies are just enough to make premiums affordable for her.

"We feel, like, so vulnerable without it," she said.

When a bizarrely late frost in May 2023 destroyed 95% of Darrow's crop, the insurance payout helped significantly with the cost of growing another crop. And the family-run business has successfully filed smaller claims on several other occasions.

But roughly 70% of the state's farms carry no crop insurance, according to Vermont Agency of Agriculture Chief Operating Officer Nicole Dubuque.

Rich said he was surprised the number wasn't higher.

"Vermont's agricultural scene is almost completely devoid of conventional grain crops," he said.

Even some dairy farmers who grow silage corn as feed choose to forgo insurance. Earl Ransom, who owns Rockbottom Farm in Strafford, called the crop insurance industry a "scam."

He said he prefers other methods of risk mitigation, some of which might not be an option for all farmers. Ransom doesn't use riverbottom land and is able to produce more crop than he needs for his cows.

"The way that I farm is built on the idea of resiliency," he said.

Ransom and Rich agreed that the only ideal form of insurance at this stage is to have a personal buffer of money, land and crop yield.

But for most, that's not the reality.

Dubuque said the state has been concerned for some time about the lack of options for Vermont growers to hedge their bets financially.

Noninsured assistance premiums can be high, she explained, and federal payout calculations are sometimes affected by other regions of the country where it's cheaper to grow crops.

There aren't enough sweet potatoes grown in the state to develop a base price for Vermont, for example. So when Rich lost all his sweet potatoes last summer, he was given the national average price for them, which is "like an order of magnitude cheaper," he said.

Rich also lost 34.5% of his potato crop, for which he'd paid higher premiums to get more coverage. The threshold for a payout, however, was 35%, he said.

The Noninsured Disaster Assistance Program's administrative process can additionally burden farmers, with monthslong wait times for federal payouts, according to Rich.

He said many small farmers who sell through farm stands and other informal venues may struggle to keep meticulous records and submit them.

"It is not a small amount of paperwork," Rich said.

Hank Bissell, owner of Lewis Creek Farm in Starksboro, said he tried only once, decades ago, to secure federal insurance for his farm. After a mountain of paperwork, he concluded that financially, "it wasn't going to do me any good."

So when the floods of 2023 and 2024 hit, the $120,000 loss Bissell endured was uninsured.

With little to no support from the federal level, he and Rich turned to the state. Both received grants from the Business Emergency Gap Assistance Program administered by the Agency of Commerce.

BEGAP isn't an agriculture program, but for both of them, it was a life raft.

"Very fast, very easy to apply for, and extremely useful for those of us affected," Rich said.

Bissell said he was able to recoup 30% of his losses through the program, which prevented what could have been a financial catastrophe.

"We'll live to gamble again," he said.

In addition to the Agency of Commerce's emergency provisions, state lawmakers introduced a bill during the last legislative session with the goal of establishing a Farm Security Special Fund for farmers.

One of the bill's sponsors, Sen. Ruth Hardy, D-Middlebury, cited the difficulty of accessing other aid for small farms, as well as shifting climate patterns, as her rationale.

"Having a fund that is designed specifically for farmers is an important tool to keep local agriculture viable in our state," she said in an email.

The bill stalled in the Appropriations Committee, but lawmakers could raise the issue in the next legislative session.

Dubuque said any amount of further aid would be helpful, but that full recovery for farms after a disaster would require a significant pool of money. Expanding the Noninsured Disaster Assistance Program at the federal level could also be helpful, she said, especially if some of the administrative burden was lifted.

Tom Zacharias, president of National Crop Insurance Services, recommended that farmers also consider federal alternative insurance options like the Micro Farm Program and the Whole-Farm Revenue Protection program, which may provide diverse operations with more comprehensive coverage.

A USDA report indicates no payouts had been made from either plan in Vermont during the 2024 crop year. Several farmers told VTDigger they had not considered these alternatives, or that both seemed prohibitively expensive.

U.S. Sen. Peter Welch, D-Vt., issued a statement Friday announcing that Vermont farmers affected by natural disasters in 2023 and 2024 can apply for expedited assistance through the USDA's Supplemental Disaster Relief Program.

Over $16 billion in aid from the 2025 American Relief Act is set to go to farmers across the country, the release said. Only producers who received aid through the Noninsured Disaster Assistance Program or through subsidized crop insurance in 2023 and 2024 are currently eligible.

Dubuque reiterated the central role of small-scale agriculture in Vermont, both for food and tourism.

"Small farms in this state are so incredibly important to our economy," she said.