Academic journal article AEI Paper & Studies

The Farm Bill, Conservation, and the Environment

Academic journal article AEI Paper & Studies

The Farm Bill, Conservation, and the Environment

Article excerpt


Executive Summary

From the beginning, conservation provisions in the farm bill have been linked to farm income support. In the past few decades, spending on conservation programs in the farm bill has both risen and remained relatively stable even in the face of budget retrenchments, so that conservation now accounts for roughly a third of direct farm program payments. The stated rationales for conservation programs in the farm bill are (1) to prevent farmland degradation to preserve productivity and (2) to mitigate environmental externalities, notably damage to water quality, wildlife habitat, and air quality.

There are clear economic efficiency grounds for policies that address environmental externalities from agriculture. We know from numerous agronomic studies that there are complementarities between many agricultural conservation measures and reductions in environmental damage, implying that conservation can play a productive role in addressing environmental externalities. And the United States Department of Agriculture has taken some significant strides in reorienting conservation programs toward environmental goals.

Together, these considerations suggest that prioritizing conservation spending, as the most recent farm bills have done, has been a good thing. Conservation spending deserves to be maintained if not increased in absolute and real terms. That said, conservation spending has not allocated those funds in ways that adequately prioritize environmental quality at the national level. Reform of funding allocation mechanisms are needed to improve the efficiency of conservation spending in the sense of getting the most environmental-quality protection for the money we spend.

On January 6, 1936, the US Supreme Court ruled the Agricultural Adjustment Act of 1933--which authorized the federal government to prop up farm prices by paying farmers to reduce planted acreage and kill off livestock--unconstitutional. Four days later, Secretary of Agriculture Henry A. Wallace unveiled a proposal for a replacement that empowered the federal government to pay farmers to replace soil-depleting crops with grass and legumes as a means of conserving soil. Funding for the program would come from the federal government, while the program itself would be administered at the local level by soil conservation district committees elected by and from the farm communitty. On February 27, 1936, Congress adopted Wallace's replacement program by enacting the Soil Conservation and Domestic Allotment Act. (1)

The Soil Conservation and Domestic Allotment Act's explicit goal was to increase farm income by cutting production to achieve a ratio of prices received to prices paid to that which prevailed during the period August 1909-July 1914. (2) From the beginning, then, federal agricultural conservation policy in the United States has been intertwined with farm income support. The waxing and waning of conservation in subsequent farm bills bears out that close connection: The cropland diversion provisions of the 1936 act were retained in the 1938 Agricultural Adjustment Act. They were suspended from 1940 until the mid-1950s as World War II, war devastation in Western Europe, and the Korean War heightened demand for US agricultural commodities. They were reintroduced in the form of the Soil Bank Program in the Agricultural Act of 1956, when US agriculture again faced reduced export demand due to recovery in Europe and the end of wartime while increases in US farm productivity increased supply.

Income support has never been the sole motivating force for conservation programs. The 1936 act built on the Soil Conservation and Domestic Allotment Act of 1935, which established an administrative structure for helping farmers control and prevent soil erosion, to "preserve natural resources, control floods, prevent impairment of reservoirs, and maintain the navigability of rivers and harbors, protect public health, public lands and relieve unemployment. …

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