LONI KEMP - The Minnesota Project
Conservation Investments:
Replacement for a Broken Policy

American agriculture is in big trouble. Walk into any grocery story and you may doubt it, with plenty of food and relatively cheap prices. But it’s what you can’t see that foretells an unacceptable future for American agriculture if we don’t change something. Environmental degradation, an alarming loss of farmers, the impending failure of export markets, dependence on high-cost energy, and rural decline are all signals pointing to big trouble ahead.

What is happening in agriculture is not the inevitable result of progress or historical trends. It is the result of specific policies set by our government, through laws ironically intended to help farmers. Those policies can and must be changed.

Government subsidies to farmers were created some eight decades ago to stabilize prices in order to soften the normal risks of farming, such as weather and price fluctuations. Those subsidies, applied to the few select crops of corn, soybeans, wheat, rice and cotton, have become an offer that can’t be refused. Since a sure thing is always better than a risk, farmers converted many acres to the subsidized commodity crops. Overproduction and chronically low prices are the context for all agriculture policy deliberations.

The unintended consequence of wiping out diversity in agriculture is vast landscapes of monoculture commodity crops that use huge quantities of chemical pesticides and fertilizers which, along with eroding soil, are washing into the nation’s rivers, lakes and groundwater. This pollution causes health risks to drinking water and a dead zone where the polluted Mississippi River flows into the Gulf of Mexico. Production choices that can benefit the environment– choices such as pasture and rangeland, hay, and crop rotations– have been squeezed out, leading to disappearance of wildlife habitat. The landscape vital to hunters, fisherman, bird-watchers, and lovers of rural beauty is diminishing rapidly.

Even the national goal of exporting our bountiful surplus crops to the rest of the world is in deep trouble. Agriculture used to be the means by which the nation achieved a trade balance, exporting food while importing cheap manufactured goods. No more. This year promises to be the first year where we import more food than we export. Free trade was supposed to open the world’s doors to our cheap commodities, but it also opens our doors to the world’s production. Multi-national agribusiness giants profit from global trade in cheap, government-subsidized grains even while farmers do not profit. Can you envision a future where we import all our consumable food and use our rich lands to export livestock feed? That is the direction in which we are moving. Yet home-land security cannot exist without a foundation of food security.

While the current subsidy system has revealed its flaws in unintended environmental and trade consequences, the World Trade Organization is looming with the definitive blow to current failed policy. Ironically, while U.S. interests lobbied to break down trade barriers in other countries, we have retained for ourselves one of the largest systems of subsidies to agriculture. Now the other shoe has dropped and the U.S. is being successfully challenged under to drastically cut our own subsidies because they distort trade by keeping prices unfairly low for the rest of the world.

In sum, in an attempt to help farmers, our policies have instead shoehorned some into a monoculture system of commodity production, pushed many off the farm, threatened the nation’s water quality, led to imports for much of our own food supply, and now those very policies are deemed illegal in the eyes of the world trade organization.
Fortunately, we have an opportunity to change policies every few years when Congress rewrites the farm bill. That opportunity is coming up in 2007.
Good policy always starts with clear goals. What we really want are profitable family farms that protect the environment. Indicators that we are moving in the right direction would be greater landscape diversity, more young farmers, and a healthy environment.

&Mac183; Landscape diversity indicates that farmers have a wider choice of what can be produced profitably. When there is more land in pasture and other perennial crops, then there is cleaner water and more habitat. If livestock are spread over more acres in grass, then there will be fewer smelly factory farms, and reduced need for the subsidized feed crops.
&Mac183; More farmers on the land would indicate that there is a future for American agriculture and more profit in every farm. Opportunities for new and young farmers will include new markets, including local demand for fresher foods. Burgeoning opportunities for renewable energy from agriculture– including wind and biomass crops– will be a new market that helps the nation solve energy and global warming crises.
&Mac183; A healthy environment is the indicator that farmers are producing food and energy sustainably– that they are not impoverishing nature or their own soil’s productivity for future generations.

These goals are coalescing in a growing national consensus that agriculture’s contribution to a healthy environment is the outcome that taxpayers should support. The public wants to support farmers but they don’t like the current system. Few constituents approve of the way subsidies now fall mainly into the hands of a few big commodity producers.

All these complex threads come together in a new approach to farm policy that is sweeping the nation in time for the 2007 farm bill. This new approach, appropriately named green payments, can support farmers for all the things they do take care of the nation’s land and water. Paying incentives for good conservation– including changes in what farmers grow– is just the alternative program we need to transform the public investment in agriculture. Green payments continue to support farmers but without the unintended consequences caused by fostering intemperate commodity production. And significantly, conservation investments do not distort trade and are not limited by trade agreements.

In fact we already have the basis for such a shift right now. The Conservation Security Program is entering its third year of revolutionizing how policy helps agriculture. Farmers enter multiyear contracts to perform excellent conservation, and they receive appropriate payments, up to a modest limit of $45,000 a year for the best operations. This kind of conservation payment foundation can be a major part of the new safety net for farmers and will encourage investments in conservation practices that protect our natural resources, as well as alternative crops that produce renewable energy. While profits rise and fall, and while farms try out new crops and markets, the Conservation Security Program is there paying for one primary product of each farm– good care for the environment.

So far, farmers are embracing the new approach, but the Administration and Congress have been slow to catch on. Insufficient funds and overly bureaucratic rules have not allowed the Conservation Security Program to fully flower quite yet. Despite that, there is broad support from nearly every sector of farm, conservation, and environment organizations to increase funding for this innovative policy that provides conservation investments. The time is ripe for a shift in funds from the failed subsidy policies of the past to green payments for the future.

How fast to implement such change is the burning question Congress must face. Experience with the 1996 farm bill shows that a big change– switching from crop payments to fixed payments– could not stand when it brought unacceptable harm to the income of farmers. Congress quickly changed course in the late 90’s and reverted to large government payments to farmers when world prices plummeted. The lesson for today is that change must include a fair safety net.

So let’s go boldly forth with a sensible proposal: Take half the money now spent on subsidies, and roll it over to the Conservation Security Program. Open the Conservation Security Program to all farmers, so that they can earn as much in conservation payments as they are willing to perform to meet stringent performance standards, up to the $45,000 limit. Every farmer would have the opportunity for a basic living from conservation. Then reform the remaining subsidy program and crop insurance to provide a safety net from violent swings in markets or natural disasters.

This shift in farm policy would enable farmers to use conservation investments to correct the trouble agriculture is now heading for. It would form a trade-neutral safety net for farmers and lead to landscape diversity, more farming opportunities, and a healthy environment.

Loni Kemp is Senior Policy Analyst at the Minnesota Project in St. Paul, Minnesota. Visit www.mnproject.org.


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This article was published in the Winter 2005 issue of Catholic Rural Life©. No portion of this article may be reproduced without written permission from The National Catholic Rural Life Conference. To purchase the Winter 2005 issue of Catholic Rural Life, please contact The National Catholic Rural Life Conference office at 4625 Beaver Avenue, Des Moines, Iowa 50310-2199, call (515) 270-2634, or e-mail ncrlc@mchsi.com. The cost is $2.50 an issue plus postage and handling.