Farming

Free crop insurance of conservation requirements, farm groups say

Congress ought to sever the link between access to reduced-price crop insurance policies and the requirement to protect wetlands and highly erodible land, said the leaders of two major Minnesota farm groups on Monday. Federally subsidized crop insurance, now the largest US farm support, is becoming the flash point in discussions about the 2023 farm bill.

So-called conservation compliance, requiring landowners to file with USDA a plan to conserve erodible lands and preserve wetlands from conversion, has been a part of US farm policy since the mid-1980s. The 2014 farm policy law made compliance mandatory for farmers to obtain subsidized premiums for crop insurance. The government pays roughly 62 cents of each $1 in premiums.

“I would not be in favor of linking conservation measures to the premiums,” said Minnesota Farm Bureau president Dan Glessing at a House Agriculture Committee farm-bill hearing session in Northfield, Minnesota. The session, attended by about 130 people, was the first held in the Midwest. Speakers were limited to three minutes of remarks.

Crop insurance “is more of a necessity than anything else,” said Glessing. Farmers said crop insurance was an expected part of the financial web that supports modern agriculture and mitigates the risk of losses. “The stakes are getting higher and higher. The amount of dollars that it takes to purchase inputs, fertilizer, seed, chemicals, each year keeps getting higher and higher,” said Richard Syverson, vice president of the Minnesota Corn Growers Association. “Crop insurance is the No. 1 farm bill priority of our 6,500 members.”

“The one thing I would ask,” said Bob Worth, president of the Minnesota Soybean Growers Association, “please do not tie any conservation or any other programs with the crop insurance. Let it stand alone. We know the importance of conservation. We also know the importance of crop insurance.”

Critics say crop insurance costs too much. Republican conservatives in the House have suggested the government’s share of premiums should be cut to 30 percent — half of its current share — and government should stop reimbursing crop insurers for administrative costs, to generate combined savings of $32 billion over 10 years.

The National Sustainable Agriculture Coalition, speaking for small farmers, said last week that billions of dollars could be saved through steps such as limiting farmers to $50,000 of premium subsidies per year or scaling down premium subsidies for the largest operators. The savings could be put into land stewardship programs or other initiatives to reduce the risk of weather-related losses, it said. “Many large commodity farmers possess the resources to continue purchasing insurance if premium subsidization were capped,” said NSAC policy specialist Billy Hackett.

The Congressional Budget Office estimated the crop insurance program would cost $9.5 billion this fiscal year. Traditional farm subsidies would cost $5.1 billion and land stewardship $5 billion, it said this spring.

Unlike farm subsidies, everyone has skin in the game with crop insurance, say defenders of the program. Farmers write large checks for coverage and must experience a loss before they see an indemnity.

“The intent is, if you go through a crop disaster, to keep you on the farm,” said Gary Wertish, president of the Minnesota Farmers Union.

A video of the listening session is available here.

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