Tag Archives: crop insurance

Senate Agriculture Committee completes its version of the 2012 farm bill

The United States Senate Agriculture Committee completed its proposal for the 2012 farm bill on April 26.  The bill will now move forward for consideration by the full Senate, possibly later this month.

The farm bill provides billions of dollars in funding for conservation programs on agricultural land, and for Iowa, a state with more than 26 million acres of cultivated cropland, no other single piece of legislation plays as large a role for soil and water conservation.

Iowa also has an important role to play in the writing of the farm bill because the state’s two Senators, Charles Grassley and Tom Harkin, are both influential members of the Senate Agriculture Committee.

This year’s farm bill debate is especially significant because Congress is trying to reduce federal spending in many areas.  The proposal the Agriculture Committee has now approved will save $23 billion over 10 years, but that includes a $6.37 billion dollar cut to farm conservation programs over the same time period.

OVERALL REACTION SHOWS MIXED PROGRESS

The need for cost savings has pushed Congress to look for ways to streamline and reform farm bill programs, and reaction to progress in the Senate Agriculture Committee’s methods for doing so has been mixed.

Craig Cox, senior vice president for Agriculture and Natural Resources of the Environmental Working Group, questioned whether Congress is working toward “real” reforms.  Cox criticized the proposal for shifting additional resources to protecting farmers’ bottom lines while cutting conservation and anti-hunger programs.

“A farm bill that cuts programs for the hungry and the environment to help finance a new entitlement program and unlimited insurance subsidies for the largest and most profitable farm operations should not be called a ‘reform’ bill,” Cox said.

But Ferd Hoefner, policy director for the National Sustainable Agriculture Coalition (NSAC), was more optimistic, praising what NSAC called “historic reforms to commodity subsidies.”

“We applaud the Senate Agriculture Committee for including common sense rules for commodity payments and ending years of abuse by closing program loopholes,” Hoefner said.  “Thanks to Senator Grassley’s tireless leadership, the Committee was able to make sure that hardworking farmers—not mega farms and absentee investors—are the key beneficiaries of farm programs.”

SOME PROGRESS ON ‘CONSERVATION COMPLIANCE’

In 1985, American taxpayers and farmers entered into a contract to provide a safety net for the country’s food producers in return for protection of critical natural resources.  Known as “conservation compliance,” this policy requires farmers to follow conservation plans that limit soil erosion on highly erodible land as well as preventing destruction of wetlands and native grasslands.  Farmers who willfully violate their conservation plans risk losing taxpayer funded benefits.

Taxpayer-funded subsidies for crop insurance are not currently linked to conservation compliance, and because insurance premium subsidies are becoming an increasingly important part of the taxpayer-funded safety net for farmers, many conservation groups including the Iowa Environmental Council believe connecting the subsidies to basic conservation expectations is critical.

The Senate took one important step toward this goal by adopting a nationwide “Sodsaver” provision protecting grasslands and native prairies which have not yet been farmed.  The provision would reduce available crop insurance subsidies by half and prohibit other farm program payments for any native prairie or grassland a farmer puts into production.

“By agreeing to a nationwide ‘Sodsaver’ provision… the Senate Agriculture Committee made sure that taxpayer dollars are not subsidizing the destruction of native grass and prairie lands,” said Hoefner.  “These lands are diminishing at a rapid rate and protecting them provides ranching opportunities and economic, environmental, and recreational benefits to rural communities.”

Protections for native grasslands are only part of the action Congress must take on conservation compliance.  The Iowa Environmental Council will continue efforts with partners to include these protections in the final farm bill.

“The Committee has acted to limit insurance subsidies for farmers who put native prairie or grasslands into production, and we are hopeful they will also apply this standard in cases where farmers drain wetlands or farm highly erodible land without sufficient conservation practices,” said Susan Heathcote, Iowa Environmental Council water program director.

“In all three of these areas, taxpayers should not help pay insurance premiums for practices that degrade the long-term health of our natural resources,” she added.  “We hope Congress will recognize the need for these common-sense conservation protections.”

CONSERVATION RESERVE PROGRAM LIKELY TO SHRINK

The Senate Agriculture Committee also agreed to reduce the number of acres protected by the Conservation Reserve Program (CRP) from 32 million to 25 million acres nationwide.

Conservation experts have argued that such a reduction only recognizes a decline in protected land that is already happening because of current market conditions.  As Heathcote wrote in a Des Moines Register op-ed in January, “farming is a business, and with recent record-breaking corn and soybean prices, farmers have a strong financial incentive to put expiring CRP land back under the plow.”

Other changes to the CRP program approved in the Senate bill will help counter some of the impact of declining enrollment, including:

  • doubling the funding for the CRP Transition Incentives Program, which helps to incentivize the sale or lease of land leaving the CRP program to a beginning or socially disadvantaged farmer who agrees to manage the land with a conservation plan.
  • allowing grasslands to be enrolled in CRP under certain conditions
  • relaxing some restrictions on livestock grazing on CRP land for beginning farmers

FOR MORE INFORMATION

The National Sustainable Agriculture Coalition is providing extensive analysis of the Senate Agriculture Committee’s version of the farm bill.  See this post for more information on Sodsaver and conservation compliance, and this post for information on other conservation programs, including more details on CRP.

Iowans speak out on farm conservation

After Iowa Farm Bureau President Craig Hill’s op-ed rejecting the idea of connecting federal crop insurance subsidies to basic conservation practices on farms, the Des Moines Register printed a group of letters responding to Hill’s argument.

In case you missed them, here are some links* so you can catch up on the conservation:

*Opinions expressed in these letters are those of the authors and are not necessarily those of the Iowa Environmental Council.

Connecting crop insurance subsidies to conservation: An idea with merit

You may have seen two very different op-ed articles in the Des Moines Register recently about the issue of whether farmers should have to follow through with conservation plans for protecting vulnerable land in order to receive federal crop insurance subsidies.

Craig Cox, from the Environmental Working Group, spoke up first, arguing that it is fair to “ask farmers to take a few basic steps to protect soil and clean up waterways in return for the billions of dollars that taxpayers spend each year to provide them with cut-rate crop insurance.”

And Craig Hill, president of the Iowa Farm Bureau Federation, issued a rebuttal soon after, saying “crop insurance…must not come with big government strings attached.”

The Iowa Environmental Council’s position

We think linking the conservation plans to crop insurance subsidies is an idea with merit, because this connection gives farmers a strong incentive to follow through with their conservation plans.  There’s evidence to suggest that conservation plans really help reduce soil erosion, and those benefits matter.

We know that many Iowa farmers are working to follow their conservation plans, but in situations where that doesn’t happen, public dollars should not reward irresponsible behavior.

Because we think this is an important issue—especially with Congress set to negotiate a new farm bill this year—we want to explain our position a little further by making two points:

Available evidence reveals broad support among the American public—and even among Iowa farmers—for connecting federal farm supports to basic protection of soil and water.

In fact, according to a July 2011 national survey, 60% of Americans believe “farmers should meet certain environmental standards such as protecting water quality or soil health” in exchange for receiving “subsidy payments and subsidized crop insurance.”

And many Iowa farmers agree, too.  As Craig Cox noted, recent Iowa Farm and Rural Life Poll results indicate 81% of Iowa farmers believe “farmers should be required to control soil erosion on highly erodible land to stay eligible for federal farm program benefits.”  And 66% of Iowa farmers go even further, agreeing that “farmers should be required to control soil erosion on highly erodible land regardless of participation in federal farm programs” (emphasis added).

Even the Iowa Farm Bureau Federation has signaled a willingness to consider the insurance subsidy-conservation connection in the past.  We haven’t forgotten the words of Craig Lang (Hill’s immediate successor), who was quoted in the Des Moines Register explaining why a movement emerged in the Farm Bureau’s resolutions committee to support the idea last August.

Lang said the resolutions committee suggested the conservation compliance working ‘as a way to prove to taxpayers that farmers will comply with conservation.’

He added:  ‘There was concern that without direct payments that there would be no incentive for farmers to comply.  We wanted everybody to understand that we would.’

The Register’s report (8/31/11) indicated that the Farm Bureau considered policy language stating “habitual offenders should not be eligible to purchase subsidized crop insurance.”

Of course, we also remember how the Farm Bureau’s delegates did away with this position the following day.

The Iowa Environmental Council believes enforcement of conservation compliance should be firm but fair.

In his op-ed, Farm Bureau Craig Hill played to fears about how connecting conservation to crop insurance subsidies could cause farmers financial ruin.  He has specifically highlighted the potential impact of heavy rain events like those Iowa has seen in recent years.

What Hill does not describe is the variety of safeguards meant to protect farmers from facing consequences for unforeseen events.

For helpful information on those safeguards, we suggest turning to the Iowa Soybean Association’s new 2012 Legal and Regulatory Guide for Farmers.  The document, written under the supervision of Neil Hamilton, a respected expert on agricultural law at Drake University, very clearly explains a farmer’s options should the Natural Resources Conservation Service find him or her out of compliance with a conservation plan.  (You can visit the relevant section of the document and read questions 9-13 for complete details.)

Specifically, under the heading “Can I challenge a finding of non-compliance?” the guide explains that a farmer can request a one-year variance to get time to return to compliance before losing eligibility for programs.

Such variances are available, the guide explains, when (emphasis added):

  1. violations occurred in order to address specific problems, including weather, pests, and disease,
  2. the failure to comply was beyond the control of the producer;
  3. the failure to comply was minor and technical in nature and had a minimal effect on erosion control, or
  4. adherence to the conservation plan would work an undue economic hardship on the producer.

And farmers can also appeal decisions they disagree with in a variety of ways, as the document goes on to describe.

Throughout this year, as farm bill negotiations continue, the Iowa Environmental Council will continue to speak out in favor of conservation programs that have produced significant benefits for Iowa’s air, water, and land.  Like most Americans, we believe that when taxpayer dollars support agriculture today, they should also maintain a healthy environment for tomorrow.