Thanks to a lot of hard bipartisan effort leading to agreement and comprise, the 2014 Farm Bill is now on the books. President Obama signed it last Friday, February 8.
Although you may not agree with the final choices Congress made on every issue, it is encouraging that our legislators were able to come together on a bill that will serve American producers and consumers as well as U.S. farm product customers around the world.
As a conservationist, I am pleased to see that minimal environmental safeguards dating back to the 1985 Farm Bill will now be re-linked to crop insurance purchase subsidies. The Sodbuster and Swampbuster conservation compliance requirements originally applied to those purchasing insurance as well as those participating in nearly all other farm programs. The link with crop insurance purchases was dropped with the 1996 Farm Bill at a time when crop insurance was not very popular. However, today about 80 percent of producers purchase it. It’s become an essential risk management tool for most farmers seeking to manage price volatility and weather variability.
Since the new law eliminates direct payments, a primary link to conservation requirements, re-linking insurance purchases helps ensure maintenance of a reasonable baseline of land stewardship. As I have said before, I believe that maintaining basic conservation standards is a reasonable quid pro quo for the taxpayer subsidies that cover about 60 percent of the cost of each crop insurance premium.
The good news is that most producers are already in compliance with the minimal environmental requirements that have been in place for 29 years. For you, nothing changes. You will simply continue to follow the conservation plan that you have. If you’re already meeting Sodbuster and Swampbuster requirements, you just need to keep doing what you’ve been doing.
With the new link to crop insurance purchases, the Natural Resources Conservation Service and the Farm Service Agency will continue to have primary responsibility for enforcing the conservation requirements as they have in the past. Insurance agents and the Risk Management Agency will focus on the crop insurance policies as before. Rules will still need to be developed for the re-linkage, and they may not be completed for this crop year, but the requirements are pretty straightforward. The Secretary of Agriculture is charged with setting penalties for violations, but the penalties cannot exceed the total paid crop insurance premium.
Producers who have not been participating in farm programs and are coming under the highly erodible land conservation requirements for the first time will have five reinsurance years to develop and comply with an approved conservation plan to remain eligible for insurance subsidies. Those determined to be in violation have two reinsurance years to develop and comply with an approved conservation plan.
For wetlands, a crop insurance purchaser has one reinsurance year to begin to remedy a violation before being declared ineligible. However, if you convert a wetland to cropland from now on, you will be ineligible for a premium subsidy in future years unless you mitigate the conversion.
For most producers, the new requirements will be seamless. Others will need to develop conservation plans for the first time, but there’s a long lead time for that. For others, there’s now a strong disincentive to draining wetlands. The key is that the new requirements are prospective rather than retrospective. What counts is what you do from February 8 forward.
The Agricultural Act of 2014 isn’t perfect, but it maintains an important emphasis on conservation and land stewardship. That’s good for the public, good for the land and good for the producer.
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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