WASHINGTON, Oct. 21, 2015 - With so many challenges faced during development of what finally became the 2014 farm bill, few relish the task of working on the next one. But the topic is already being discussed in public and private conversations. And in the background, data is being gathered, reports commissioned and coalitions built.
For example, the path forward on crop insurance being linked to conservation compliance -- and potentially other environmental requirements -- was the focus of a recent Farm Foundation Forum in Washington.
“In 1995-96 farm bill (negotiations), the linkage between crop insurance and the farm programs under conservation compliance was severed,” pointed out Bruce Knight, president of Strategic Conservation Services and the moderator of the event. “In the most recent farm bill they were reunited. That has in turn caused a great deal of interest in the conservation community: Should there be further linkages?”
AGree Executive Director Deb Atwood made it clear that her group, an eight-year effort launched in 2011 with funding from eight different foundations, has already been talking to the crop insurance industry about ways to offer incentives to farmers who apply soil-health practices such as no-till farming and growing cover crops. Atwood said the data they’ve been collecting still needs to be integrated and analyzed, but “if our data proves out with powerful information, we will be advocating for specific changes in crop insurance policy.”
University of Illinois Professor Bruce Sherrick suggested that improvements in both crop insurance ratings and conservation could be beneficial, but questioned whether they need to be combined.
The efficiency question remains, he pointed out: “If you had one more dollar to spend to encourage conservation, would you spend it on a crop insurance incentive? If a change does anything to limit actuarial efficiency, it’s probably not a good idea.”
In the past, analysis of these issues has been difficult because there were multiple programs in place to support farmers, like ad hoc disaster programs and the “Title One” programs, explained University of Mississippi Agricultural Economist Keith Coble. “Trying to sort the effect of crop insurance alone on the environment is a really nasty problem to try to address.” Still, he said he was “somewhat hopeful that we are in an era of technology that will enable us to answer questions that we have not been able to do so in the past.”
Indiana farmer Dan DeSutter is an Eisenhower Fellow and as part of that program he studied agriculture in Australia and New Zealand last winter. He made a strong case during the Farm Foundation Forum for getting rid of all farm subsidies in the U.S. - similar to what those countries did over 30 years ago.
He said it wasn’t that long ago that he wanted to get rid of direct payments in the U.S. and put all farm bill money into crop insurance and conservation. Now his position has evolved.
“We have to start today” to change the image and practice of U.S. agriculture, said DeSutter. USDA’s Natural Resource Conservation Service and other agencies are doing tremendous work to help farmers make their operations more environmentally and politically sustainable, he said, but “I’m here to tell you that crop insurance is one of their biggest impediments.”
“Subsidized crop insurance insulates folks from poor agronomic choices… (and) mutes the message of the marketplace (from) getting back to the farmer,” he argued. DeSutter, who farms 4,400 acres near Attica, Indiana, said he planted a mono-culture of corn for three years because crop insurance guaranteed three times the net profit of any other crop he could plant, even if he couldn’t harvest a bushel. “It should be the market that tells farmers what to plant, not crop insurance,” he said.
DeSutter said it’s in the farmer’s best interest to use conservation practices, whether they are paid by the government to do so or not. After all, he said, we know of some practices that are proven to boost carbon content – or organic matter – in the soil, and those improvements have “a tremendous impact on our bottom line,” by increasing yields and decreasing input costs.
“If we are determined to subsidize, then we should look at it from a taxpayer standpoint,” DeSutter added. “And we should pay farmers for ecological services, because most Americas are willing to pay for those.”
Sherrick argued that it would be “complicated to say crop insurance, on balance, has been better or worse on any particular environmental issue. In many cases, the simple compliance rules may have promoted or improved peoples’ awareness of particular issues like best management practices.
“The question is, do you lose the ability to communicate one issue by tying it to another?” Sherrick asked. “So if there’s a business practice to improve soil health, that’s a great business practice. If there are ways to improve the ratings system in crop insurance, we need to improve the ratings system.”
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