It is highly unlikely the 2012 farm bill will include the same safety nets that the 2008 farm bill included, and many farmers and several agricultural organizations are betting that the survivor for money to farmers will be some form of crop insurance.
Brad Redlin, Izaak Walton League, director of agricultural programs, was in charge of several farm bill discussion forums in six Midwest states, the last one being in Minnesota near the end of July. The discussion meetings were some of the earliest being held by the government or any other organizations. Meetings were held in Illinois, Iowa, Minnesota, Missouri, South Dakota and Wisconsin.
“There are three means to deliver money to producers through the 2008 Farm Bill titles—commodities, conservation and crop insurance. Those are the primary three means in which taxpayers dollars are provided to agricultural producers,” explained Redlin.
Izaak Walton League contends, “The next farm bill is certain to see an emphasis on risk management amid likely intense budget-trimming pressure.”
Redlin’s presentations provided what seemed like a strong case for tying farmer conservation compliance to being able to participate in crop insurance as a safety net.
“The conservation title in the (2008) farm bill provides different means by which a producer can engage in conservation for their operation, customized to their operation and essentially provide public benefits for all of us by doing do. They do achieve things. If that conservation title didn’t exist, we’d have 450 million more tons of top soil lost every year; there would be 170,000 miles of streams that wouldn’t be productive and 480 million more tons of carbon dioxide and 482 million fewer acres of wildlife habitat,” Redlin said at a forum in Kansas City.
Redlin contended that “on average nationwide, the government picks up about 60 percent of the cost for producers buying crop insurance.”
He went on to explain crop insurance is where the most farm bill money goes to farmers each year. “Crop insurance has become incredibly popular in recent years. In the past 10 years, it has quadrupled in size in the farm bill budget.” That is growth in total dollars paid toward policies and indemnities paid out.
The increase in insurance has mainly come from more “revenue insurance,” which pays based on a set spring grain price goal, according to Redlin. For example, if the fall price of corn drops lower than the set price, then the insurance pays the difference between the set price and market price.
Farm bill conservation compliance is not required for crop insurance payout. Conservation is required if taxpayer money is available to a farmers signed up for commodity crop subsidy programs and conservation payments. Such things as not protecting soil from erosion or farming a wetland area eliminates a farmer from potential farm program monies.
Government budget cuts could adjust revenue insurance, but Izaak Walton League, following its spring and summer farm bill forums, still thinks crop insurance tied to conservation compliance make the most sense to be included in the 2012 farm bill.
Redlin said, “Crop insurance is not necessarily a bad model for how crop producers should be supported. Crop insurance should come into effect when things go bad for a producer—if market prices drop or if there is a disaster. That is where crop insurance can make them whole again.”