On Brownfield Ag News’ Next Gen Podcast, TIFS’ Tina Owens and Michigan Department of Agriculture director Tim Boring explore how better risk models could change the economics of regenerative agriculture—and what this means for the next generation of farmers.
What happens when farmers invest in practices that make their land more resilient, but the financial institutions they depend on can’t recognize that reduced risk?
This question is at the heart of a recent conversation on Brownfield Ag News’ Next Gen Podcast, where Tina Owens, who leads the Resilience in Agriculture Lending & Insurance Coalition (RALIC) at Transformational Investing in Food Systems (TIFS), joined Michigan Department of Agriculture and Rural Development (MDARD) Director Tim Boring to discuss the future of agricultural risk.
Speaking with hosts Erin Anderson and Kellan Heavican, Owens and Boring explored how crop insurance, soil health, and farm profitability intersect—and why advances in data and risk modeling could change the financial outlook for the next generation of farmers. The conversation comes at a consequential moment as new actuarial evidence and analytical tools challenge longstanding assumptions about agricultural risk, opening the door to financial products that better reflect the resilience farmers are building in their fields.
Listen to the conversation on Brownfield Ag News’ Next Gen Podcast.
The financial dilemma facing farmers
Traditional crop insurance provides essential protection against unpredictable losses, but its reliance on historical yields and county-level averages can overlook important differences between individual farms. As Owens explains, current pricing relies on “backward-facing data” that doesn’t adequately capture the benefits of improved soil health.
For farmers transitioning to regenerative practices, that limitation can have serious financial consequences. Investments in cover crops, diversified rotations, and reduced tillage can strengthen a farm’s ability to withstand drought and other weather extremes. Yet temporary yield reductions during the transition may affect insurance coverage and the operating loans connected to it.
Owens describes the situation as a “cul-de-sac of non-choices” related to existing farm finance and insurance infrastructure. Farmers may recognize the long-term benefits of improving their soils but face financial disincentives that make those investments difficult to pursue.
The problem is especially pressing as producers contend with increasingly volatile weather, rising operating costs, and uncertainty about future profitability. Insurance models built around historical performance struggle to capture how agricultural practices can influence resilience and may even penalize producers if changes impact their short-term crop yields.
A different way to understand risk
One of Owens’ most compelling observations concerns emerging actuarial evidence showing how dramatically risk profiles can differ between farms.
She describes research suggesting that three years of consistent soil-health practices, including cover cropping, crop rotation, and no-till farming, can produce risk differences comparable in magnitude to those between smokers and nonsmokers in health insurance.
It’s a striking comparison: insurance companies routinely distinguish individual risk profiles when pricing other types of coverage. Agricultural insurance, however, has historically had fewer tools to account for field-level management practices and the largest system in the U.S. prices costs only at the county level for all producers, leaving positive field-level changes unrecognized.
Advances in agricultural data and analysis are beginning to make those distinctions possible. As Owens discusses in the podcast, new analytical capabilities, including artificial intelligence, are helping researchers, insurers, and financial institutions better understand the relationship between soil health, production variability, and financial risk.
If researchers can reliably measure these differences and incorporate them into insurance models, farmers investing in healthier soils could see immediate and tangible financial benefits through lower premiums and, potentially, access to lower costs of credit. The implications extend to how agricultural lenders evaluate farm operations and how financial institutions account for the long-term value of regenerative or soil-centered practices. More accurate risk assessments could help make investments in soil health a more financially viable choice for producers.
Michigan brings the concept into practice
The conversation also shows how these ideas are beginning to move into the marketplace.
With a $480,900 investment from MDARD, RALIC and its partners are advancing NextGen Crop Insurance, an innovative pilot launching for eligible corn and soybean growers in four Michigan counties beginning with the 2027 crop year. The eligible counties are Saginaw, Tuscola, Huron, and Sanilac in Michigan’s “thumb” area.
The program will test an insurance model that incorporates field-level agricultural practices into risk assessment, working to offer lower premiums to farmers who invest in soil health. Participants will be able to maintain their existing federal crop insurance and relationships with local agents.
For Boring, the initiative reflects Michigan’s commitment to supporting farm profitability and long-term resilience while addressing environmental priorities, including water quality. His perspective grounds the conversation in the practical challenges facing producers and the role public institutions can play in encouraging financial innovation.
Owens sees the pilot as an opportunity to test whether emerging evidence can support a different approach to insurance pricing, with lessons that could eventually inform products in other states and agricultural markets.
The initiative builds on years of collaboration among insurers, researchers, public agencies, and farmers through RALIC. Michigan will provide an important opportunity to evaluate the model’s performance and develop the evidence needed for wider adoption.
Learn more about RALIC and the NextGen Crop Insurance pilot.
An inflection point for agricultural finance
When the conversation turns to agricultural policy and the needs of future generations, Owens describes the current moment as “the question of our time.”
Her observation reflects a growing recognition that better information on soil health and agricultural resilience could influence financial decisions far beyond insurance premiums.
This possibility is also explored in TIFS’ recent white paper, Pricing in Resilience: The Future of Financial Services for Soil Health, developed with Triangle Digital and the University of Michigan’s Center for Digital Asset Finance. The paper examines emerging innovations in insurance, lending, and investment that could bring regenerative agriculture’s economic benefits into mainstream financial markets.
For TIFS, this work is part of a broader effort to address the financial barriers that have limited investment in regenerative food systems. Through RALIC, the organization is working with financial institutions and researchers to develop tools that better recognize the value farmers create through improved soil health. The Brownfield conversation brings these broader ambitions into focus through the everyday financial decisions producers face. Crop insurance affects whether farmers can secure operating loans, manage uncertainty, and invest in their farms’ future. Changes to how risk is assessed could have lasting consequences for the agricultural practices financial markets encourage.
Building on the momentum
Owens and Boring’s conversation offers a compelling glimpse of an agricultural finance system beginning to reconsider how it measures risk. Evidence is emerging, new financial models are being tested, and institutions that have traditionally approached soil health and financial performance separately are finding reasons to work together.
There is still considerable work ahead. Expanding innovations like NextGen Crop Insurance will require continued actuarial research, technical development, and collaboration with insurers, lenders, and farmers across different crops and regions.
Philanthropic investment can accelerate that progress by supporting the evidence and shared infrastructure needed to bring new models into broader use. Funders have an opportunity to help shape financial systems that reward resilience, creating benefits that extend well beyond any individual pilot.
As Owens suggests in the podcast, this could become a defining period for agricultural finance. The question is how quickly emerging evidence can be translated into practical solutions that give farmers greater financial security and make regenerative practices more economically viable.
Listen to the full Brownfield conversation to hear Tina Owens and Tim Boring discuss the future of agricultural risk management and what it could mean for the next generation of farmers.
Listen to Can Agriculture Reinvent Risk Management for the Next Generation?
To learn more about supporting or partnering with RALIC, contact Tina Owens at tina.owens@tifsinitiative.org.
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