May 8, 2012
Changes in the 2012 Farm Bill coming out of the Senate Agriculture Committee are set to expand the role of crop insurance as the single largest crop subsidy. The Congressional Budget Office estimates that federal crop insurance subsidies under current law will total $90 billion over the next decade. The Senate Committee-passed bill further increases the cost of the program, yet does not require the recipients of the subsidies to take basic precautions to protect natural resources.
In 1985, Congress wisely decided that basic soil and wetland protections should be a requirement for any farm receiving any type of farm subsidies. In 1996, crop insurance subsidies were delinked from conservation requirements intended to protect highly erodible land and conserve wetlands.
The argument at the time was that crop insurance was a small program in need of much greater participation, hence the fewer requirements the better. Since then, however, the premium subsidy has grown from less than $900 million in 1995 to a $7.3 billion subsidy in 2011 that covers over 260 million acres of farmland, with a participation rate of 80 percent for the major commodity crops. Clearly the arguments used in 1996 to delink the programs no longer hold.
The issue for the 2012 Farm Bill is quite simple – will taxpayers be told to shell out close to $100 billion in insurance subsidies over the next decade and not even have the assurance that environmental harm and harm to our future food security will be minimized in the process? And will farmers, who in polls and surveys overwhelmingly support the highly erodible land and wetlands conservation provisions, be denied a level playing field in which a few bad actors can destroy wetlands or allow excessive soil erosion while still taking public subsidies?
So far, the answer of the Senate Agriculture Committee sadly has been yes. They approved a farm bill that does not even contain minimal basic conservation requirements in return for massive insurance subsidies. But this need not be the final answer. The full Senate will take up the bill soon, quite possibly in June, and could vote to relink conservation with crop insurance subsidies.
In our 2012 Farm Bill platform, Farming for the Future, NSAC urges Congress to reestablish this crop insurance conservation compact, thus preserving our natural resources while improving the farm safety net. NSAC has also proposed legislation to accomplish this common sense objective.
Over the past few weeks a spate of editorials in leading farm state newspapers have decried the Senate Committee’s approval of a Farm Bill that fails to relink crop insurance to conservation compliance:
Many others also support the position of these editorials that crop insurance subsidies should be relinked to highly erodible land and wetland conservation compliance requirements. Earlier this year, four letters were delivered to the Agriculture Committees in support of relinking crop insurance to conservation — one from two former U.S. Secretaries of Agriculture, one from four former Chiefs of the Natural Resources Conservation Service, a third from 15 national conservation organizations including NSAC, and a fourth from 90 water groups including the American Water Works Association, National Association of Clean Water Agencies, Association of State Drinking Water Administrators, National Association of Water Companies.