Ag Policy Blog
Chris Clayton DTN Ag Policy Editor

Monday 05/06/13

Groups Strike Deal on Conservation, Crop Insurance: No Means Tests

A list "who's who" of groups in agriculture, conservation and wildlife has come together for a delicate compromise on the farm bill meant to avoid any means testing when it comes to crop insurance premium subsidies while keeping some provisions linking conservation compliance to crop insurance.

More than 30 groups signed on to the letter Monday to Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., and committee ranking member, Sen. Thad Cochran, R-Miss.. The groups described their proposal as a "delicately crafted compromise" and thus the groups signing the letter to the senators indicated they would not accept changes to their proposal.

Groups stated in their letter that, "In the spirit of compromise and in the interest of completing a 2013 Farm bill this year, each of the groups has committed not to support amendments beyond this compromise that might weaken the crop insurance program or amendment that might not link conservation compliance with crop insurance premium assistance."

The agricultural and crop-insurance groups seek to remove language from an amendment last year offered by Sen. Dick Durbin, D-Ill., and Sen. Tom Coburn, R-Okla., to reduce premium subsidies by 15% for farmers who earn more than $750,000 in adjusted gross income. That amendment passed on the floor last year 66-33 and was scored to save about $1.2 billion over 10 years. It would affect about 1,500 farm operations nationally.

In return for getting rid of means testing for crop insurance, the agricultural groups agreed to a plan that would tie conservation compliance to crop insurance with stipulations involved.

Stabenow has said her bill would be built on the legislation that passed the full Senate, which had included both the Durbin-Conrad amendment, as well as the amendment on conservation compliance.

The agricultural and conservation groups stated in their white paper, obtained by DTN, that they have been negotiating to find common ground on conservation compliance and crop insurance.

Thus, the groups offer a plan that would make a farmer ineligible for the premium subsidy the year after a violation in compliance is found, or until the infraction has been fixed. Also, those who are subject to highly-erodible land provisions will have five years to implement a conservation plan before they risk their premium subsidy. On wetlands, farmers would have a two-year period to mitigate the wetland drainage to retain eligibility to receive crop insurance premium subsidies.

Farmers who have not been in compliance since enactment of the 2008 farm bill also will have two years to develop a conservation or mitigation plan to retain eligibility for crop-insurance premium subsidies.

The compromise would put the onus on USDA's Natural Resources Conservation Service to validate and confirm a producer is in compliance after a self-certification form is filed. Otherwise, there would be no penalty on the farmer.

"If USDA fails to evaluate the Form 1026 change in a timely fashion and the producer is later found to be in violation of the law, the producer would held harmless. If, however, the producer fails to file a new Form 1026 and is found in violation, USDA would determine an equitable fine for the producer not to exceed the Federal government premium assistance during the years of violation."

The groups also concur that, "The swampbuster or sodbuster provision for crop insurance must not have clawback provisions. If someone converts wetlands or breaks up HEL after May 1, 2013, the newly converted lands must be mitigated in accordance with current law."

In return for the compliance provisions reached in the agreement, the groups signing the letter want the crop-insurance means-testing provision struck from the Senate farm bill.

"We oppose any provisions that provide for means testing or payment limitations on crop insurance premium assistance or indemnities. We also oppose any reduction in premium subsidies."

The groups argue that means testing or reduction in premium subsidies would disrupt the pool of farmers who would enroll in crop insurance. That risks increasing the premiums for everyone.

"In order for farmers with greater risk to have access to affordable insurance, farmers from all risk profiles need to participate in the pool. Established farmers on proven land make it possible for smaller growers and farmers in riskier areas to get proper risk protection from the private sector."

Groups signing onto the letter included:

American Association of Crop Insurers

American Farm Bureau Federation

American Farmland Trust

American Society of Agronomy

American Soybean Association

Association of Fish and Wildlife Agencies

Audubon

Crop Insurance and Reinsurance Bureau

Crop Science Society of America

Ducks Unlimited

Environmental Defense Fund

Land Improvement Contractors of America

National Association of State Conservation Agencies

National Association of Conservation Districts

National Association of Resource Conservation and Development Councils

National Conservation District Employees Association

National Corn Growers Association

National Cotton Council

National Council of Farmer Cooperatives

National Farmers Union

National Wildlife Federation

Pheasants Forever

Pollinator Partnership

Quail Forever

Soil and Water Conservation Society

Soil Science Society of America

Southern Peanut Farmers Federation

Theodore Roosevelt Conservation Partnership

The Nature Conservancy

USA Rice Federation

Wildlife Mississippi

World Wildlife Fund


I can be found on Twitter @ChrisClaytonDTN

Posted at 8:41PM CDT 05/06/13 by Chris Clayton
Comments (9)
What I find interesting in this article is that about 2/3 of those listed are not directly involved in agriculture. I am not going to do the case history of each, I think most are quite dependent on the taxpayer for exixtence. Is it any wonder how and why the food program is so full of politics.
Posted by Bonnie Dukowitz at 5:52AM CDT 05/07/13
I wonder how long it will be before a class action suit is filed. With terminology like prior converted and farmed wetlands not only does this involve the taking of lands but also equal protection. When a producer converted a wetland before a certain date those producers will enjoy all of the subsidized benefits and the producer that improves their land after that date will be denied. Sounds descrimintory, unconstitional and unamerican.
Posted by Young Farmer at 7:00AM CDT 05/07/13
This only helps big farms get bigger. Usually small farmers don't have the resources to get approvals or the money to buy the land again thru mitgation. These groups should get their checkbooks out and pay for the mitigation and on top of that in the land lost. This land is taxed as agricultural cropland. This is a illegal taking of lands without compensation. Some of these people need to read the constitution. Property rights is what made this country.
Posted by Young Farmer at 7:13AM CDT 05/07/13
The lack of a means test shows the farm bill is only to make the rich richer. Sad that multimillionaire farmers and crop insurance companies continue to reap unneeded benefits at the expense of small farmers and normal tax payers. Agriculture should be ashamed!
Posted by Bill Billson at 7:43AM CDT 05/07/13
I can understand AFBF signing on to this- conservation compliance has always been a joke. I've never heard of any meaningful penalties being assessed to an "out of compliance" farmer. So from their perspective, they can trade the compliance provision for opposition to means testing from the other groups, and look environmentally friendly in the process. And I can understand the green groups- they've never really cared about the structure of farm programs (it simply isn't their mission) but, given the weakness of compliance enforcement, it is a little disappointing to think this is the best they could get. What's really needed is a total overhaul of the compliance system. What I don't understand is the National Farmers Union signing on to this agreement. Since when do they care more about conservation compliance that the structure of the farm economy? Truly embarrassing, and it is hard to believe that what members they have left actually support this deal. It looks like the last membership-based farm group that actually tried to represent family-scale commodity production has joined up with the big boys to promote unlimited crop insurance subsidies to the richest farmers (and non-farmers, too). A sad day.
Posted by Dan Owens at 8:36AM CDT 05/07/13
This sure sounds like agenda 21
Posted by Young Farmer at 1:16PM CDT 05/07/13
As a farm family that has practiced zero-till since 1978,I feel that conservation compliance should be a prerequisite to crop insurance eligibility.After our 8.43 inches of rain this past April,it's disheartening to see all the soil erosion.
Posted by W Lee Deutsche at 3:08PM CDT 05/07/13
I would like to promote notill but you need drainage first.
Posted by Young Farmer at 3:46PM CDT 05/07/13
Considering the insurance subsidy limitations would affect 1500 farmers out of the couple million farmers nationwide, it goes to show you who controls the purse strings. This P.O.S. white paper is a perfect example of the "rich and powerful" few controlling the discussion (capitalism at its finest). Crop insurance should be tied to conservation compliance, and there should be a clawback provision for the past 5 years to get the people who circumvented the rules to drain and tile wetlands. I am okay with getting rid of small wetlands in the middle of fields, so long as they make another wetland larger to maintain the ratio of tillable land on the farm.
Posted by Pedro Sanchez at 9:58AM CDT 05/08/13
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