The Relinkage of Conservation Compliance to Crop Insurance in the 2014 Farm Bill

Abstract

When crafting the 2014 farm bill, policymakers made the decision to relink conservation compliance to crop insurance, a federal program that helps farmers manage their risks. The provision of conservation compliance aims to curb the erosion of farmland and the depletion of wetlands by disincentivizing farmers from participating in high-risk production practices. This thesis explores the ideological pillars, process of approval, and practical outcomes of this policy. This exploration reveals that, despite its lofty goals involving environmental preservation, the statute of conservation compliance only succeeds in appeasing political dissent. Before the passage of the farm bill, several environmental groups championed conservation compliance. These groups blamed crop insurance for the depletion of migratory waterfowl habitats in the Midwestern United States, and believed that reattaching conservation compliance to crop insurance might curtail these effects. Though conservation groups were the first to call for the reinstitution of this provision, it was Senator Saxby Chambliss (R- GA), driven by regional agricultural tensions, who introduced the amendment relinking conservation compliance to crop insurance. Two similarly intentioned provisions were also discussed during the farm bill debate: AGI Limits, a provision meant to reduce premium subsidy support on rich farmers, and Sodsaver, a policy that would reduce the amount of native grassland converted to crop acreage. Conservation compliance, AGI Limits, and Sodsaver all addressed a potential ramification of crop insurance: moral hazard. The concept of moral hazard, the assumption that risk mitigation practices provoke riskier behavior, refers to the correlation between crop insurance and environmentally harmful changes in agricultural land-use. If a farmer’s risks are covered, he may be more likely to farm high-risk land that normally may not be economically sound to farm on. Though these latter provisions had the potential to be more effective policies against the effects of damaging agricultural practices, conservation compliance was the most politically neutral. Thus, thanks to the stewardship of Senator Debbie Stabenow (D- MI) and a compromise between agricultural and environmental groups, only conservation compliance was included in the final bill. Both supportive and opposing parties have subsequently identified lingering issues within the provision of conservation compliance. Some environmentalists criticize the nature of the policy, claiming that the narrow scope of conservation compliance misses many environmentally harmful externalities of crop insurance. Others highlight issues stemming from policy enforcement. Farming advocates assert that the convoluted system confuses farmers, while environmental activists point out that the bureaucracy’s failure to enforce the policy diminishes its efficacy. Conservation compliance offered a politically neutral solution to the environmentally damaging ramifications of moral hazard in the Federal Crop Insurance Program. In practice, however, the version of this policy in the 2014 farm bill weakly enforces environmental initiatives. Despite some disappointment with the provision, conservation compliance could also be seen as a reaffirmation of agri-environmental initiatives within agricultural policy. Though its motivations were largely political, the relinkage of conservation compliance to crop insurance in the 2014 farm bill marks a renewed commitment to policies addressing the relationship between agriculture and the environment.