Also of major concern for farm legislation reform are direct payments and other farm subsidies, programs many lawmakers say are the target of tough debate as Congress attempts to reduce the federal deficit. But while reducing budgets gives the impression that money will be saved, that’s not always the case.

For example, in recent years, direct payments—a  type of farm commodity program payment—have made up a large share of Federal agriculture assistance that could be withheld from farmers who fail to comply with highly erodible land conservation (conservation compliance and sodbuster) or wetland conservation (swampbuster) provisions, known collectively as environmental compliance requirements.

If direct payments are sharply reduced or eliminated to help reduce the Federal budget deficit, compliance incentives would be reduced on many farms, potentially increasing environmental quality problems. Some farmers will still be subject to compliance through existing Federal agricultural programs (e.g., conservation or disaster programs) or programs that may succeed direct payments.

 

Policy makers are now saying making federally subsidized crop insurance subject to compliance could also make up some of the lost incentive to farmers.

In 2010, an estimated 448,000 farms (about 20 percent of all farms) received direct payments and accounted for 283 million acres of cropland. In the absence of direct payments, 126,000 of these farms (28 percent of cropland) would still be subject to compliance because they also receive conservation payments. Farms that receive disaster assistance are also subject to compliance, although data limitations preclude an exact estimate of farms that receive (or are likely to receive) disaster assistance.

Roughly 141,000 farmers, about 7 percent, operating on 33 million acres of cropland, or about 8 percent, received direct payments in 2010 but did not purchase crop insurance or receive conservation payments. For these farms, extending compliance requirements to cover crop insurance would not replace incentives lost if direct payments are ended.

In 2010, 181,000 farms (9 percent), operating on 141 million acres of cropland (36 percent), received direct payments and also purchased crop insurance, but did not receive conservation payments. For these farms, making crop insurance subject to compliance sanctions could compensate for compliance incentives lost if direct payments end. (1)

But in the end, it remains possible that ending direct payments could decrease conservation compliance which would, in effect, reduce farm land in America—another Congressional faux pas.

In times of economic trouble and debatable government spending programs, few farmers are questioning the need for lawmakers to be more responsible. It is the unbalanced approach of Congress and the current Administration to fairly treat the agriculture community on an even keel with other industries. But as lawmakers focus on an election year and on winning points for being fiscally conservative, all bets are off that farmers will get little more than a casual nod for their many contributions to the welfare of a hungry nation.

 

(1) Claassen, Roger. The Future of Environmental Compliance Incentives in U.S. Agriculture: The Role of Commodity, Conservation, and Crop Insurance Programs