by Matt Kasper
In the United States the biggest and most influential farm policy tool is written by Congress every five years: the farm bill.
On April 26, the Senate Agriculture Committee passed the “Agricultural Reform, Food and Jobs Act of 2012,” setting the stage for a month-long legislative wrestling match over this massive and complicated sector.
While there’s been a lot of attention turned to the $4.49 billion cut to the Supplemental Nutrition Program (SNAP), formerly known as food stamps, there are also some serious shortcomings related to climate change and crop insurance.
Crop insurance companies have paid $9.1 billion in indemnity payments to U.S. farmers for 2011 due to the historic flooding, droughts, and other natural disasters — a new record for claims in the history of the program, according to USDA’s Risk management Agency.
The Congressional Research Service projects an average of $9 billion a year on subsidized insurance premiums between 2013 and 2022; and $1.5 billion a year in payments for losses based on revenue shortfall not covered in the crop insurance program.
The problem is that the U.S. is experiencing some of the most severe floods and droughts in recent history – with extreme rainstorms in the Midwest doubling over the last 50 years and record-breaking droughts causing billions of dollars in damages.
These severe weather events are having a negative effect on crop yields, and are therefore putting more pressure on insurance claims. And it’s only going to get worse. According to climate scientists, the future holds far more devastating droughts, more floods and more heat waves.
This has resulted in the Senate looking to end direct payments to farmers and replace them with subsidized insurance programs. However, this shift does nothing to move the agricultural sector toward the solution: mitigation and adaptation to climate change.
Julia Olmstead of the Institute for Agriculture and Trade Policy explained in a recent post on the issue:
This acknowledgement of increased risk for agriculture has not, however, been coupled with any specific acknowledgement of its primary cause—climate change—or of farmers’ need to take steps to make their cropping systems more resilient to extreme weather. Yet such adaptive measures are not being talked about in the current Farm Bill debate. Creating a federal crop insurance system with no limits on federal outlays without simultaneously giving farmers the tools to adapt to the effects of climate change is incredibly irresponsible from both a food security and fiscal perspective. It’s like offering a home owner a fire insurance policy, but not even requiring the most basic preventative measures, such as smoke alarms or fire extinguishers.
It is becoming clear that farmers are facing growing stress from climate change, and that greater implementation of diversified agricultural systems is a productive way to make our agricultural systems more robust and resilient.
Subsidizing farmers $9 billion a year through a federal crop insurance program without investing in either the tools to help farmers adapt to climate change or help mitigate the problem doesn’t make sense. We need to help deploy incentives in a smart, forward-thinking way – and that means helping farmers minimize risk and build resiliency in their fields. Olmstead calls it a “climate compliance plan”:
Climate compliance would require that farmers develop and follow a USDA-approved climate adaptation and mitigation plan (either as a stand-alone plan or incorporated into an existing conservation plan) that is adapted to local conditions. In drought-prone regions this might mean selecting drought-tolerant crop varieties, changing grazing or irrigation management, or other strategies. In flood-prone areas this could mean incorporating more perennial crops, utilizing cover crops, or planting buffer strips. Just as climate change will not affect all farms equally, there will not be a one-size-fits-all prescription for adaptation. After creating a climate compliance plan, farmers can receive support from Farm Bill programs such as EQIP to offset the costs of these transitions.
Diversified systems are becoming more important for agriculture as climate fluctuations have increased. Agroforestry, for example, protects crops from extreme storm events (e.g., hurricanes, tropical storms) in which high rainfall intensity and hurricane winds can cause landslides, flooding, and premature fruit drops.
Adding a climate compliance plan to the farm bill may add some costs; however, those costs would be offset by a reduction in long-term losses.
The increase in extreme weather has made the need for better risk-management practices very clear. The 2012 farm bill could be an important platform for talking about how to prepare our agriculture for a more diverse, resilient future.
Matt Kasper is a Special Assistant with the energy policy team at the Center for American Progress. Stephen Lacey contributed to this report.