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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