Tag Archive | "grassland"

Crop Insurance and Wildlife: Swift Fox at Risk

Crop Insurance and Wildlife: Swift Fox at Risk

 

Map showing acres converted to cropland

Swift fox habitat on converted acres. Copyright Environmental Working Group.

Crop insurance subsidies are taking center stage during the 2012 Farm Bill debate, as drought hits farmers across the country and economists talk about $10-$15 billion in taxpayer insurance costs with some insurance recipients receiving more than $1 million in support. Direct payments are eliminated in both the Senate’s 2012 Farm Bill and the House Committee on Agriculture’s bill and both versions of the bill expand crop insurance subsidies – a change that encourages farmers to plow up habitat that is valuable for species such as the swift fox.

To read more about swift fox and crop insurance, read our fact sheet.

Once abundant, swift fox now only inhabit about 60% of their former range. They rely on shortgrass and mixed-grass prairies of the Great Plains for prey and shelter. A majority of this habitat overlaps with and has been greatly impacted by cropland and other habitat conversions. Subsidies are a driving force behind this habitat loss – a report by Defenders of Wildlife and Environmental Working Group shows that crop insurance subsidies contributed to the loss of more than 900,000 acres of grassland, shrubland and wetland in parts of Colorado where the swift fox is found between 2008 and 2011.

In the past, farmers plowing up native grassland or draining wetlands would be denied certain subsidy payments, including direct payments, crop insurance, disaster payments and some farm loans. These programs, “sodsaver” and “swampbuster” respectively, became important tools in the fight to stem the loss of grasslands and wetlands and are part of “conservation compliance” requirements. The idea behind conservation compliance is that farmers receiving taxpayer support must take measures to protect environmental resources that provide valuable public benefits.

The 1996 Farm Bill removed crop insurance from the list of farm payment programs that are subject to compliance provisions. Conservation compliance has been proven to protect clean water, prevent soil erosion and preserve wildlife on millions of acres of America’s farmland. As a result of a bipartisan floor amendment, the Senate version of the 2012 Farm Bill reestablishes the link between conservation compliance provisions and crop insurance subsidies. Unfortunately the House Agriculture Committee bill fails to do so, compounding the threats that species like the swift fox and sage grouse are already facing from habitat loss.

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Shifting Farm Safety Net Threatens Conservation Investments

Shifting Farm Safety Net Threatens Conservation Investments

The Farm Bill has an entire title dedicated to conservation, and USDA, which implements the Farm Bill, dedicates tens of millions of dollars to helping restore and recover species like the sage grouse and red-cockaded woodpecker. But with the 2012 Farm Bill shifting farm subsidy support from direct payments to crop insurance, the farm safety net could work at cross purposes to conservation investments by encouraging farmers to plant on environmentally sensitive land.

To read more about conservation compliance and crop insurance subsidies, see our fact sheet.

Between 1982 and 2003, the U.S. lost 25 million acres of grassland, most of which was converted to cropland. Subsidies to farmers are an important factor driving this land use change because subsidies reduce the financial risks farmers face and government payments can make farming marginal land profitable. A recent USDA report found that certain farm subsidies (crop insurance, marketing loans and disaster assistance payments) increased the conversion of habitat by 2.3 million acres in just a portion of the Northern Plains and with crop prices at record highs, between 1.5 million and 3.3 million acres of wetlands are at risk of conversion. It’s not only that insurance subsidy payments contribute to grassland and wetland conversion but that they contribute to this conversion on some of the most vulnerable land.

We have the tool to decrease these habitat losses – conservation compliance. The idea behind conservation compliance is simple: farmers receiving taxpayer support must take measures to protect environmental resources that provide valuable public benefits. That means not planting on native grassland or draining wetlands if they receive farm subsidies.

Conservation compliance has been part of direct payments since 1985 but was de-linked from crop insurance subsidies in 1996. As farm subsidies shift from direct payments to crop insurance in the 2012 Farm Bill, it is time to re-link full conservation compliance measures to crop insurance. With a bipartisan floor amendment, the Senate version of the 2012 Farm Bill does just that and now the House needs to follow suit.

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Vanishing Prairies and Vanishing Protections

Vanishing Prairies and Vanishing Protections

The “Protect our Prairies Act,” offered by Representatives Noem and Walz aims to protect our rapidly disappearing prairies. This protection is urgently needed because grassland loss rates of 10% to 15% recorded in key areas of the prairie pothole region from 2008 to 2011 imply a loss of 50% to 75% of this critical resource within 15 years. Unfortunately, proposed protections offer only a small fraction of protections provided in past farm legislation even though today’s need is vastly greater.

The amendment works by denying crop insurance and other subsidies for five years to farmers that plow up grasslands. Unfortunately, Economic Research Service (ERS) economists’ most recent estimate suggests that denying crop insurance and other program subsidies for five years could reduce grassland conversions in the Northern Plains only as much as 9% compared to conversions that would otherwise occur. Since the Protect our Prairies Act only reduces these crop insurance subsidies by half, and only for four years, reductions in the rate of prairie loss are likely to be less than 4%. This is a step in the right direction, but only a baby step.

A more aggressive approach would deny federal subsidies on sodbusted land permanently, as was the case in farm legislation prior to 2008. Doing so offers double the economic sanction compared to the version of sodsaver analyzed by ERS, and four times the sanction in “Protect our Prairies.” We advance from achieving “the less than 9% reduction” in grassland conversion for the ERS option, to achieving less than 18% reduction in the grassland loss.

According to ERS, high crop prices have become the major driver regarding loss of prairie, even though government subsidies to farmers in the region have greatly increased. Government payments fell to 20% of net farm income, while an earlier study found these payments were 53.7% of net farm income in the South Dakota of 1996-2001. Prices of major crops in the region have tripled.

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Budget Savings, Wildlife Benefits, and Family Farmer Benefits from Limiting Government Subsidies to the Largest Farms

Farm program subsidies, crop prices, and land values all tripled in the Dakotas in just 15 years, as has the loss of prairie pothole grassland.  Eastern North Dakota lost 10% to 15% of wetlands and grassland to crop use in just three years.  At this rate, most of the remaining grassland habitat in this major nesting region for ducks and shorebirds will be gone in just 15 years.

This is not a good time to abandon 25 years of protection for wetlands and grasslands, but crucial protections will vanish unless the Senate amends the farm bill recently passed by the Senate Agricultural Committee.  Fortunately, a budget smart farm bill amendment by Senators Toomey and Shaheen aims to save billions of tax dollars by limiting federal crop insurance subsidies to the largest farmers to $40,000 per farm.  Since the larger farmers own the great majority of the land, these subsidy limits also considerably reduce major farm program drivers for prairie grassland and wetland conversion.

Limiting crop insurance subsidies to $40,000 per farm primarily aims to reduce the federal budget deficit.  This works because subsidy limits especially affect the largest 10% of crop farms, who enjoy 75% of the program payments.  These giant farming operations historically increase their subsidies by adding more cropland.  They expand 1) by buying other farms, 2) by renting, and 3) by plowing up prairie pothole grassland.  But farmers large enough to already reach the proposed $40,000 payment limit no-longer will increase their subsidy by increasing cropland area.  Today’s more than 90 percent of farms, and all small farms, will not be directly affected by the proposed subsidy limits because their government subsidies are less than $40,000.  They own a very small portion of the crop land in the U.S., even though they still make up the vast majority of farms.  Subsidy limits actually help them compete.

Although the farm bill under consideration in the Senate (S3240) virtually eliminates compliance and swampbuster protection, Senator Cardin introduced a Senate amendment (2219) to re-introduce these important protections which have been part of farm programs for 25 years.  We think that this amendment is crucial, but its focus is soil conservation and wetland protection, not grasslands.  The $40,000 per farm limits on crop insurance subsidies, which Senators Toomey and Shaheen introduced in another amendment, reduces program pressures to plow up more prairie grassland and drain wetlands.

For over three decades, the U.S. Department of Agriculture has cautioned that farm subsidies could tilt the playing field toward the largest farmers, who capture so much of the subsidies, and away from more modest, family farms.  Meaningful payment limits address these uneven playing field problems, as well as the above budget and wildlife problems.

Meaningful subsidy limits address perverse incentives to expand cropland acreage, whether that expansion occurs by buying up neighboring farms or by busting out more prairie pothole grassland and draining wetlands.  The Senate has an opportunity simultaneously to achieve substantial budget savings, to provide major wildlife benefits, and to better serve family farms.

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