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.
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It is a very difficult proposition to get farmers to give up those sweet government subsidies and the direct payment insurance program is going to be one of the hardest to force them to give up. Each year, for the past three that I have been watching, ALL agricultural organizations have emphasized the need to not only keep the direct payment program but to increase the coverage. Farmers and ranchers would much rather have healthy high yield crops then to suffer losses. The losses are not all covered. Forcing them to deal directly with insurance companies might force those who have not already begun adaptation to start. But the fact that we are having this discussion, and the Senate is thinking about making changes, illustrates how far down the climate change road we have come. With each season come worries that were not there 20 years ago.
“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 also an indirect subsidy to the fossil fuel industry.
As a very small farmer, I see there’s a definite need to eliminate the subsidies to the BIG agri-corps, who often ARE using unsustainable and very energy-expensive practices. Such things are indeed de facto oil subsidies.
What we need is a Farm Bill that prioritizes local supplies, rebuilds the infrastructure necessary for small farms to function (such as small slaughterhouses for meat/chicken, cooperative marketing programs, programs that connect farmers without land to people who have land they don’t wan to see developed, etc), and funds teaching new farmers and local officials the fundamentals of climate change and how to use the land without abusing the land in ways that require minimal chemicals and fuel. Many small farmers do a lot of those things already, but routinely run into obstructions from local boards who know zilch about farming (for example, demand restrictive rules, setbacks, and numbers for chickens because their only view is the factory “farms,” not caring such rules would make it impossible to actually make a living).
“Farmers and ranchers would much rather have healthy high yield crops then to suffer losses. The losses are not all covered. Forcing them to deal directly with insurance companies might force those who have not already begun adaptation to start.”
Obviously, farmers prefer good yields to losses. That’s common sense. But such a blanket statement ignores the fact that many of us farm DIFFERENTLY from the big boys, because we have to. Small farms cannot compete with the mega-acreage and subsidies that make monocropping possible, so most of us have some form of polyculture for both market and personal food supply, combining compatible crops that are almost impossible to farm mechanically.
What we’ve been trying to do, among other things, is change the law to have insurance that covers all of a farm’s produce rather than the current system, which is typically crop by crop. As it is now, most of us couldn’t afford policies for every crop we grow, while the big boys can insure 1000s of acres under one policy. Dealing directly with insurers wouldn’t help us b/c we’re too small for them to even notice.
Ironically, the big boys benefit from subsidies originally aimed at Depression-era family farmers, but which have become “sacred cows” and de facto political payoffs in the Farm Belt states. Redirect them to small folks, say by putting an acreage maximum on them, and we’d probably see the abandonment of places that have been farmed for decades but should never have been farmed for ecological reasons (such as the Llano Estacado). If we do that, though, we need to make sure there’s a concerted effort in place to restore something resembling the native grass mix and/or windbreak trees plus wild herbivores, or we’ll see that soil blowing away just as it did in the Dust Bowl years. Such restoration should start now, with repeated studies showing the depletion of the Oglalla there and other water supplies elsewhere.
Water’s not likely to be a huge issue where I live (MA) except in the sense of competition from urban populations, but temperature definitely will be. We’ve already seen 90-plus temps this spring and crazy temp swings, and that variability isn’t good for most crops. I support requiring climate compliance plans, but those need to be crafted on the local level and that will require expanding (often creating) our extension programs’ ability to adequately predict climate impacts on the small-scale.
very informative thank you.
We are going to need farmers like Gus more than ever in the near future. Huge agri business may give us cheaper food but it also gives us the environmental problems too. As an example. the manure that Gus’s animals produce is probably seen as a valuable resource.
Another Huge problem with industial scale agriculture is it’s lack of flexibility. When change happens, and it will, the industrial system will not be able to respond in a timely manner.