2013 Farm Bill: Conservation Compliance and Crop Insurance
By Bruce Knight
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Are you continuing to follow the conservation program established to protect highly erodible land and wetlands on your farm or ranch? If so, you'll be in compliance with new requirements proposed for the 2013 Farm Bill that tie protecting the land to eligibility for subsidies for crop insurance.
Since the 1985 Farm Bill, which included so-called Sodbuster and Swampbuster requirements for protecting fragile land, agricultural landowners have needed to meet minimal conservation commitments to receive farm program payments. Some of these payments are being reformed or eliminated in the 2013 Farm Bill, and conservation requirements may now also be linked to crop insurance subsidies.
I think this is an excellent compromise to ensure that the public receives an environmental benefit in exchange for helping farmers manage risk through crop insurance. (It also makes the public investment in crop insurance more defendable.) Those who are currently in compliance with Sodbuster and Swampbuster won't need to do anything differently. And those who need to come into compliance will have a transition period to develop a conservation plan for highly erodible land. With enactment of the new bill, there will be an immediate restriction on draining wetlands for those purchasing subsidized crop insurance
Under the proposed provisions in the draft 2013 Farm Bill, self-certification of compliance with environmental requirements would remain the same as would current enforcement procedures, which would continue to be handled by the Farm Service Agency (FSA) and the Natural Resources Conservation Service (NRCS). The crop insurance agents will have no role in enforcement. In addition, NRCS would give priority for conservation planning to newly covered producers.
About 80 percent of farmers use crop insurance as an essential risk management tool to manage price volatility and weather variability. Farmers and ranchers do pay a premium for the insurance, but about 60 percent of the actual cost is covered by the taxpayers through USDA subsidies. So the public has a stake in crop insurance and should receive an appropriate benefit linked to its investment. I believe that expecting farmers who purchase crop insurance subsidized by taxpayers to meet the basic conservation requirements that have been in place for more than 25 years is a reasonable exchange.
Earlier this year we talked about striking the right balance between managing risk without encouraging producers to plant crops on land that is better left in grass or as wetlands. I believe the new provisions currently being considered for the next farm bill do that. Those farmers and ranchers who already have conservation plans to protect highly erodible land and to preserve wetlands simply need to keep doing what they've been doing to continue receiving crop insurance subsidies. Others will have a reasonable time to establish a conservation plan and come into compliance.
Farmers and ranchers who have opted out of farm program payments and drained wetlands or plowed highly erodible land since 1985 but want to participate in USDA-subsidized crop insurance program will need to mitigate the changes they've made to their land as part of the process of developing a conservation plan. Landowners will still have the option to participate in the crop insurance program if they choose not to make required conservation changes to their land, but they will pay the full, unsubsidized price of the insurance.
The provision linking conservation and crop insurance will likely be debated this week in the Senate version of the farm bill. It is the result of a historic agreement struck between farm groups, conservation groups, crop insurance advocates and the environmental community. This is an unusual convergence of thought between groups that don't always see eye-to-eye. However, they recognized that working farmers need a strong, vibrant safety net offered through crop insurance and most of those who own, manage and work the land want to be good stewards and are willing to meet conservation objectives. Both sides found agreement, and hopefully Congress can do the same.
I believe our lawmakers have it within their grasp to develop a farm bill that supports farmers and ranchers in making wise land use decisions and managing risks while at the same time provides environmental benefits in exchange for the public's investment in agriculture. I hope you agree.
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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