Conservation compliance rewards farmers

By INHF on June 26, 2012 in Blog

Strong conservation can keep the land boom from going bust

We applaud the [Des Moines] Register's May 4, 2012, editorial, which concludes: “The federal government plays a major role in agriculture, and in exchange, it is not too much to ask that all farmers who benefit should be good stewards of the land.”

That is why the U.S. Department of Agriculture has conservation compliance policies that help protect soil, water and wildlife. These policies also help stabilize commodity and farmland prices for farmers. Farm organizations lobbying for weaker policies must have forgotten the hard economic lessons of history.  However, the traders behind the falling corn market have not forgotten.

Boom and bust

Our farm economy has gone through many boom and bust cycles. Predictably, high crop profits sow the seeds of destruction, as farmers plant more and more acres, and intensify production from all their cropland, eventually causing prices to plummet. Extended periods of good crop prices invariably inflate farmland prices that rise until over-production bursts these speculative bubbles. America's 20th Century history shows three economic cycles where the boom went bust after just a 10- to 15-percent increase in planted acres.

There were no conservation compliance policies in place when American farmers planted 34 million additional acres to meet World War I export demand.  It took the Great Depression and new federal policy interventions to reduce plantings 20 million acres by 1940.

When exports boomed again during World War II, there were no conservation compliance policies in place. Plantings returned to the previous high of 387 million acres by 1949. That boom brought low crop prices that reduced the number of farms by one third in just 10 years. Congress turned to mandatory production controls and a multi-year Soil Bank program to idle over 50 million acres of cropland in the 1960s.

Still, there were no conservation compliance policies in place to slow the conversion of marginal lands to cropland during the 1970s export boom. America's planted acres increased by 50 million acres, eventually bursting a hugely inflated farmland bubble. In Iowa, many individuals, families and dreams were broken as this state's farmland lost 63 percent of its market value between 1981 and 1986.

Congress and the Reagan Administration responded with a long-term Conservation Reserve Program (CRP) in the 1985 Farm Bill that gradually idled 36 million crop acres. The CRP helped save soil and wildlife: It also brought stability to falling land markets.

Along with CRP, the 1985 Farm Bill introduced conservation compliance provisions that discouraged farmers from bringing new land into production by draining wetlands or planting long-established grasslands. Compliance measures also required those farming highly erodible land to use basic soil conservation practices. This was especially needed in Iowa, a state that had lost half its topsoil to erosion. Those who violated conservation rules would be ineligible for USDA subsidies, including subsidized crop insurance. Unfortunately, the farm lobby soon stripped this insurance link out of USDA policy.

More than conservation

Congress is now rewriting farm policy, and we need Congress to remember that compliance policies are not just about conservation; they also discourage overproduction. Congress ended most production controls with the 1996 Farm Bill. Since then, CRP and conservation compliance policies have slowed the rush to increase plantings when grain prices rise. However, these broken tools may not be enough to keep the current land boom from going bust. For example, Iowa farmers alone have converted over one million acres of grass and grazing lands to cropland in the last 25 years.

Except for the National Farmers Union, the farm lobby seems unconcerned about preserving the supply management value of conservation compliance. A USDA Economic Research Service review of proposed conservation compliance changes for the 2012 Farm Bill recently estimated that 259 million acres might no longer be subject to compliance requirements when subsidies are cut. If this happens, agriculture could easily return to overproduction and low crop prices.

Conservation policies stabilize the farm economy

However, the report also predicts that if subsidized crop and revenue insurance once again requires conservation compliance, then 391 million acres would have greater ties to conservation. This policy reform is essential to protect the farm sector – not to mention the landscape – from its own excesses.

Lawmakers who remember the hardships of the 1980s farm credit crisis should insist on increasing CRP funding and re-linking conservation compliance to insurance subsidies. Economic opportunities, prosperity, rural quality of life and the ability to feed our nation depend upon conserving our soil and land to meet future needs. America deserves a Congress and a farm bill that settle for nothing less.

Written by Iowa Natural Heritage Foundation Public Policy Director Duane Sand & Iowa Farmers Union President Chris Petersen