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Published March 26, 2012, 02:38 PM

EWG: tie conservation to crop insurance

WASHINGTON — Congress should attach conservation compliance requirements to subsidized crop insurance in the next farm bill but should only use the lowering of the farmer premium subsidy as a penalty for those who do not comply rather than making farmers ineligible for coverage, Environmental Working Group officials said March 15.

By: Jerry Hagstrom, Agweek

WASHINGTON — Congress should attach conservation compliance requirements to subsidized crop insurance in the next farm bill but should only use the lowering of the farmer premium subsidy as a penalty for those who do not comply rather than making farmers ineligible for coverage, Environmental Working Group officials said March 15.

“No patriotic American wants to prohibit farmers from purchasing crop insurance,” Scott Faber, EWG vice president for government affairs, said at a news briefing. EWG is a Washington-based group dedicated to protection of the landscape.

Faber and Craig Cox, the EWG senior vice president for agriculture and natural resources, said rumors that environmentalists want farmers to lose eligibility for crop insurance if they are out of compliance are wrong.

“We don’t propose that the Risk Management Agency deny the ability to purchase crop insurance,” Faber said. “The penalty would be a lower premium subsidy.”

Most farm groups are opposed to tying crop insurance and conservation compliance together, and Senate Agriculture Committee Chair Debbie Stabenow, D-Mich., has said that farmers would still have to follow government conservation rules to be eligible for other commodity programs. Both the farm groups and the crop insurance industry have said they think a conservation compliance requirement for crop insurance would be hard to enforce because insurance is sold through private agents.

Faber, who recently joined EWG from the Grocery Manufacturers Association, said he expects farm prices to remain high, which would mean that the conservation compliance requirement attached to commodity programs probably won’t be worth much because farmers will be unlikely to get payments under those programs and won’t worry about losing eligibility for those payments.

At present, farmers have to comply with conservation requirements to receive the $4.9 billion in direct payments, but Congress is almost certain to end that program in the next farm bill.

Cox said that when he drives around his home state of Iowa he sees the kind of conditions rising again that led to environmental degradation during the farm boom of the late ’70s and ’80s. After farm prices plummeted, Congress established the Conservation Reserve Program to idle fragile land and reduce production and other programs to help farmers improve soil quality, protect wetlands and reduce runoff.

With commodity prices so high, the pressure to increase agricultural production is now so intense that the improvements in soil conservation and wildlife habitat in the last 30 years will be lost if the government does not maintain conservation compliance tied to a key program, Cox added.

Under the CRP the government pays farmers to idle up to 32 million acres of land. With farmers viewing production as more lucrative than putting land in that program, Congress and the Obama administration have proposed reducing the size of that program to 25 million or 26 million acres.

Cox and Faber said they think that the decision about putting land in the CRP should be left up to farmers, but that if the CRP budget is reduced, the money should be used to help farmers with other conservation programs such as the environmental quality incentives program or the conservation security program.

Spending shift

EWG officials also said that they would try to convince Congress to spend less money on crop insurance and shift the money to conservation and nutrition programs.

A conservation compliance requirement was attached to crop insurance in the 1980s, but it was later dropped in an attempt to convince farmers to take out crop insurance. About 80 percent of crops are now insured and Faber maintained today that since the government has achieved its goal, subsidies to farmers for premiums and payments to crop insurance companies and agents to deliver the policies can be reduced.

EWG has proposed that the government provide a policy to protect farmers against yield reductions and that revenue policies be handled through the private sector. Faber also said that EWG has commissioned Bruce Babcock, an economics professor at Iowa State University, to study “what should a safety net really look like,” and that that study will be released in a few weeks.

Cox noted that farmers are spending $4 billion per year on crop insurance premiums and EWG thinks they could still use that money to buy revenue coverage.

While EWG is not ready to announce a farm bill policy, Faber said he is far more favorable toward the American Farm Bureau Federation proposal for a “deep loss” program than commodity group proposals for a “shallow loss” program or higher target prices.

Faber said he has not endorsed the Farm Bureau proposal, but had planned to speak to a Farm Bureau group on March 20. Cox said he is also worried that either a “shallow loss” program, which would pay farmers for losses that crop insurance does not cover, or higher target prices to trigger payments more easily would encourage too much production and be bad for the environment.

Faber contended that both nutrition programs and conservation programs have been cut in recent years, but acknowledged that overall spending for both programs has increased. But Faber noted that higher food stamp benefits under the Recovery Act are scheduled to be reduced and Cox noted that conservation spending has been cut “from what’s been promised in the farm bill.”

Asked whether EWG is bringing out its proposals too late to affect farm bill deliberations, Faber said he thinks the farm bill is “in the third inning of a nine-inning game,” and that EWG wants to influence both members of the agriculture committees and other members of Congress.

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