2012 Farm Bill: Continuing Conservation Compliance

By Bruce Knight

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With the 2012 Farm Bill, farm programs will be changing.  That seems almost certain.  So, if a minimum level of conservation compliance is tied to programs that no longer exist, and market conditions are ripe for fence-to-fence planting, how do we encourage protection of wetlands and highly erodible land?  That's the debate that is heating up this week on Capitol Hill.

This discussion is producing extraordinary emotionalism in farm country and among conservationists and environmentalists.  The two groups have been polarized for the better part of 20 years and have a tendency to talk past each other rather than engaging in true dialogue to find a mutually agreeable solution.  That's a shame, and it's time we worked together instead of at cross-purposes.

The simple answer to this conundrum is finding another vehicle to hitch the conservation compliance wagon to.  The most likely program is crop insurance. 

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The 1985 farm bill established a conservation floor with provisions commonly called swampbuster and sodbuster.  These are basically minimal environmental provisions that prohibit farmers who want to participate in commodity support programs from draining wetlands or planting on highly erodible land.  Following these conservation requirements is the quid pro quo for the taxpayer support given through the commodity programs.  It was also required for those purchasing crop insurance until 1996.

In the mid-90's, crop insurance was not very popular, and to encourage more producers to purchase it, Congress severed the link between participating in the insurance program and maintaining minimal environmental protection.  However, 15 years later, crop insurance has become an essential risk management tool for most farmers seeking to manage price volatility and weather variability.  About 80 percent of farmers use it, and it works.

Farmers pay premiums for the insurance, but taxpayers cover about 60 percent of the cost of each crop insurance premium.  That's a substantial investment, and taxpayers should receive an appropriate benefit.  I suggest that continuing to fulfill the obligations imposed by swampbuster and sodbuster would provide the public environmental benefit sufficient to warrant ongoing crop insurance support from taxpayers.

This is an approach that I think will find broad support, provided we address some specific concerns.  For example, the insurance companies, wisely and rightly, do not want to be held responsible for overseeing conservation compliance.  They need not worry.  Congress has said clearly that USDA cannot delegate oversight.  Rather, farmers should continue to self-certify compliance in protecting highly erodible land as they currently do.  The Farm Service Agency and the Natural Resources Conservation Service would continue to handle enforcement.

Of course, there are some producers who oppose linkage of crop insurance purchases to environmental requirements.  Especially in the Midwest, in states such as Kansas, Nebraska, Minnesota and the Dakotas, there is significant pressure to plant more acres to grain.  Additional acreage would only be available through improved drainage.  Farmers in those areas fear “regulatory creep,” that somehow, someone will discover more acres of wetlands on their maps and prohibit planting on those acres.

If we could agree that wetlands designations made previously will stand, and the standard for conservation compliance will continue to be the swampbuster and sodbuster requirements established in 1985, then I think we could move forward.

Even as crop insurance has become a farmer's most important risk management tool, the taxpayers have increased their investment substantially.  And farmers have benefited.  Over the past three years, more than $20 billion has been paid out through crop insurance and disaster programs to cover agricultural losses.  Senator Saxby Chambliss (R-GA) has an amendment to the farm bill currently under debate to re-link crop insurance and conservation compliance.   It is a good amendment and should be adopted.     

Linking crop insurance and conservation can benefit multiple interests.  If conservation and environmental groups can join forces with farmers and insurers, we can form a new alliance that can defend public investments in both conservation and crop insurance.   To be successful this alliance will need to stop sniping at each other.  This is an approach that will strengthen sustainability while also improving productivity.  Let's encourage Congress to establish this linkage in the next farm bill.

About the author: Bruce I. Knight, Principal, Strategic Conservation Solutions, was the Under Secretary for Marketing and Regulatory Programs at the U.S. Department of Agriculture (USDA) from 2006 to 2009. From 2002 to 2006, Knight served as Chief of Natural Resources Conservation Service. The South Dakota native worked on Capitol Hill for Senate Majority Leader Bob Dole, Rep. Fred Grandy, Iowa, and Sen. James Abdnor, South Dakota. In addition, Knight served as vice president for public policy for the National Corn Growers Association and also worked for the National Association of Wheat Growers. A third-generation rancher and farmer and lifelong conservationist, Knight operates a diversified grain and cattle operation using no-till and rest rotation grazing systems.

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