Conservation Compliance & Federal Crop Insurance Program deb

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Conservation Compliance & Federal Crop Insurance Program deb

Postby feathhd » Tue Jan 10, 2012 12:56 am

Many big players are arguing against conservation compliance being associated with the Federal Crop Insurance Program. Some wish to plow ahead in the name of high profits why throwing U.S. Tax payers the Federal Disaster Clean Up Bill or Environmental Clean Up Bill as it relates to Non-Point source contamination of our countries Rivers, Lakes and associated wetlands. Gulf Coast Hypoxia issue is a prime example.

All the while many are plowing it under, draining it to get every last bit they can planted into row crops without being held responsible or liable for any of the consequences rendered. That's ok I guess because the consequences are PAID by U.S. tax payers who are the same folks who pick up the Bill for crop subsidy payments, Ethanol subsidies etc. It seems to me based on what I have read, the U.S. Tax payer simply cannot afford to continue paying at both ends, why many are left to throw conservation compliance to the preverbal Voluntary Conservation Compliance Federal Crop Insurance Wind.

The above debate in congress is very real as many crop or farming safety net programs that have not experienced high participation levels will more than likely be consolidated / eliminated. Below is a sample letter that I sent out to Senators & Representatives of Iowa who serve in Washington DC.

Message sent to the following recipients:
Representative King
Senator Grassley
Senator Harkin
Message text follows:

John Doe
xxxx xxxx
Ames Iowa xxxxxx

October 29, 2011

Dear [recipient name was inserted here],

Conservation compliance is vital to the state of Iowa based on the major
flooding of the Mo. River. Run Off was the key to the flooding and without
conservation compliance in the federal farm Bill crop insurance portion,
we will see Floods even greater than what was seen this year and in future
years. No question about it. Again, run off was the main reason for the

Iowa is an agricultural state, and any change to US farm policy
significantly impacts Iowans as well as the resources of our state. As a
member of the Ag Committee, you have the power to re-establish
conservation compliance requirements for federal crop insurance subsidies
that were part of the 1985 Farm Bill. I'm writing to ask you to do your
part to ensure that all new crop and revenue insurance or other risk
management programs that make up a safety net for farmers do not
incentivize environmental degradation.

I support a safety-net for farmers as long as farmers agree to basic
conservation practices that provide a safety net for our soil and water.
No taxpayer money should be given to producers who drain wetlands or farm
highly erodible soils without a conservation plan. Without conservation
compliance provisions in the Farm Bill, millions of acres of wetlands
could be drained and countless tons of soil could be washed off farmland
into our rivers and lakes.

In 1985, the nation's consumers and farmers entered into a contract to
provide a safety net for the country's food producers in return for their
help in protecting critical environmental and natural resources. That
contract should be restored & Honored in the next Farm Bill for the mutual benefit
of farmers and the natural resources upon which farms and the rest of
society depend.

Please ensure the Agriculture Committee recommendations to the Super
Committee require conservation compliance for crop and revenue insurance.
xxxxx xxxxxxx

Please feel free to utilize the above letter and send it to your Senator & Representative in DC.
Let them know that you support a safety-net for farmers as long as farmers agree to basic
conservation practices that provide a safety net for our soil and water.
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Re: Conservation Compliance & Federal Crop Insurance Program deb

Postby feathhd » Tue Jan 10, 2012 1:04 pm

Hello gentlemen, we certainly share your interest in and concern about the effects of subsidized federal crop insurance.

Mr. Babcock (CARD report) is certainly an ideal expert for research and background on the evolution of insurance. Of course, the issue area is also extremely broad, and at times, fairly complex. But, if only to confuse things further, I wanted to share some of the work we're doing at IWLA regarding the subject of crop insurance in the context of the 2012 Farm Bill. I will get to the subject of MO River floods and insurance impacts, I promise.

Of particular concern to us is that crop insurance has already become the primary "safety-net" subsidy for production agriculture. The Marketing Loan program payments (loan deficiency payments, marketing loan gains, even the generic certificates) are based on a loan rate that is simply irrelevant in today's market prices (i.e. $1.95 for corn which is selling for $7; or $0.52 for cotton which is selling for $1.20; and on-and-on for all major commodity crops), as are counter-cyclical payments (i.e. $2.63 target for corn, $0.71 target for cotton, etc.). The only thing left is the Direct Payment program, and that is being targeted for budget cuts on the one hand, and on the other hand is seeing producers simply drop out of it since those payments require swampbuster, sodbuster and HEL-compliance to maintain eligibility while crop insurance currently does not. (And the typical Midwestern corn producer may avg. about $25/acre in Direct Payments, but may get $200 or $300/acre through subsidized revenue crop insurance.) So, we have prioritized making crop insurance subject again to the conservation compliance provisions as it originally had been when established in 1985 (the 1996 "freedom to farm" bill carved out the single exception for crop insurance subsidies alone not being subject to compliance).

See our congressional issue brief at: ... on/i/11073

and our written testimony attached.

See also our powerpoint presentation (delivered at the Soil and water Conservation Society's annual conference in DC in July, the America's Grasslands Summit in SD in August, and anywhere else anyone will let me) at: ... MUN4dnc9PQ

Further, the practice of providing New Breaking written agreements for crop insurance on newly converted land that has never been in production before enabled a producer to insure virgin ground at the county average yield (whatever that may be, maybe say 145 bushels/acre, certainly more in some places) and receive a revenue guarantee (i.e. the spring price guarantee for corn revenue insurance this year was $6.01) that would mean it didn't matter if the seed broke the surface----that producer could receive insurance payout of a guaranteed $697/acre under a revenue policy at 80% coverage with enterprise units (meaning his premium was subsidized at 68%). See attachments textbox #5 and table #1. Slightly better news is that as of June of this year, any virgin ground insured on the first year of production may only receive 65% of the average county (or "T") yield. (see RMA bulletin at: ... 11-006.pdf )

So, to the subject MO River flooding and crop insurance, there is no question that most producers will continue to crop that land under the current crop insurance program incentives. And many will/are trying to convert more land still since swampbuster and sodbuster won't apply to them and the subsidized insurance on that ground anyway. Remember, too, that if the land is flooded at planting time they can still get the insurance payout for their expected production through the "prevented-planting" provisions of federal crop insurance----although also as of this year, they can now only get prevented-planting payments limited to maximum of 4 straight years, instead of, for example, the 17 straight years recorded by a North Dakota producer whose land was and remains under water for that long. Still, per the RMA bulletin linked above, if they can actually get a crop into ground that had been prevented-planted for 4 straight years, they could still get it 100% insured under New Breaking written agreement provisions (being it is land with a prior cropping history, as opposed to land with no prior cropping history getting 65% of T-yield).

Anyway, way more than you need or wanted, and possibly entirely redundant with what you were already well aware of, but I wanted to spell out the concerns we have at IWLA and how we're trying to work with agriculture interests to allay those concerns...and on that note, recent news in IA last week showed the good and bad in that effort: ... servation/ ... heartening

or listen to the radio report at: ... ance-link/
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