The insects may feed on living plants, but they'll hide under leaf litter. Fusarium grows on the decaying plant matter, which has spores that can be shuttled from the soil surface by the insects that travel between the litter and the living plant.
I've used leaves as mulch. I've never had a problem with bugs or fungus. I grow in no till living soil though, and bugs and fungus are a part of the biomimicry process. It could be because it's living soil, that I haven't had a problem. I wouldn't use leaves if I was watering in bottled nutes, but then again, I wouldn't mulch.
Fusarium doesn't always cause problems, but it can be tragic when it does strike. When it's in the soil, among other microorganisms, it seems to be fine because there's an equilibrium and spores are relatively immobilized. However, it is an avoidable risk when it proliferates on surface leaf litter. Wind and insects can potentially devastate a crop by transmitting spores to plants genetically vulnerable to a fusarium infection.
I don't use hay but I do use straw. Each has it's own advantage. Hay is more solid texture than straw and will add more nutes than straw, but straw is hollow and will hold water better.
I realize with biomimicry, you get the good, with the bad. The trick is keeping it all in check. Keep your soil thriving with beneficial insects, fungus, and bacteria, and nature will do the rest.
I use malted barley straw. It's been working really well for me. Hay seems like it would be a lil too heavy to me. I may try it sometime though, just to see how it works. It may be beneficial in no till for adding nutrition to the soil.
I use wheat straw. That's what we have here. I get them 50 or 60 bails at a time. We use a lot of mulch. One thing about straw is it's capulary action that draws the water into it.
I like to use horsetail reeds for the same reason, they're hollow like straw. And, I feel like that air space might help insulate the soil somewhat from temperature fluctuations, compared to a denser mulch. They are also high in silica, which is great for the soil.
That might be better than straw. Straw mashes flat when you walk on it. How about th horsetail reeds?
Thanks. I know what they are now.