Conservation Compliance in the Crop Insurance Era

By Claassen, Roger; Bowman, Maria | Amber Waves, July 2017 | Go to article overview

Conservation Compliance in the Crop Insurance Era


Claassen, Roger, Bowman, Maria, Amber Waves


Since the 1930s, the Federal Government has set policies that support farm incomes in the event of low crop prices or crop failure. These policies also encourage farmers to conserve soil and, in more recent years, enhance environmental resources like water and air quality. By the 1980s, however, policymakers realized that farm support and conservation programs could work against each other. While conservation programs supported farmers in reducing soil erosion, for example, price and income support programs encouraged them to expand crop production onto environmentally sensitive lands, including erosion-prone land and wetlands. By linking farm program benefits to conservation, policymakers sought to limit these unintended consequences.

Conservation Compliance, first enacted as part of the 1985 Food Security Act, makes soil and wetland conservation a condition of eligibility for most Federal farm programs. Under Highly Erodible Land Conservation (HELC), farmers who grow crops on highly erodible land must apply an approved conservation system-one or more practices that work together to reduce soil erosion. Under Wetland Conservation (WC), farmers must refrain from draining wetland for crop production.

Compliance can encourage soil and wetland conservation on farms where the Compliance incentive exceeds the cost of meeting Compliance requirements. The Compliance incentive is based on Federal farm program benefits. Farmers who violate HELC or WC could become ineligible for many Federal agricultural programs, including commodity (income support) programs, crop disaster assistance, voluntary conservation payment programs and-under the Agricultural Act of 2014-crop insurance premium subsidies. Because the farmer becomes ineligible, benefits could be lost throughout the farm, not just on land where the violation occurred. The cost of Compliance requirements includes the cost of applying conservation systems on cropland in highly erodible fields and income foregone on wetland that could have been profitably farmed after draining except for Wetland Compliance.

While Conservation Compliance can protect and improve environmental quality by using farm program benefits to incentivize the adoption of environmentally sound practices, a critical question is whether these programs do protect these resources. In other words, have these programs had a measurable effect on soil erosion or wetland conservation on U.S. farms? Are incentives large enough to sustain these gains over time? And how have changes in the Agricultural Act of 2014 affected compliance incentives?

HELC and Soil Erosion

The implementation of HELC (1985-1995) coincided with a 38-percent decline in soil erosion on U.S. cropland. Between 1982 and 1997, cropland erosion dropped from 2.93 to 1.83 billion tons per year. While the timing of erosion reduction suggests that HELC played an important role, farmers also respond to a wide range of market and policy incentives (including the adoption of new technology) in selecting crops and production practices-decisions that also have a large effect on soil erosion.

Previous ERS research showed that roughly 25 percent of erosion reduction during 1982-1997 occurred on highly erodible cropland that was cropped continuously. The balance of erosion reduction occurred on land that is not highly erodible (and therefore not subject to HELC), or resulted from an overall decline in the amount of land used for crop production.

Because of the broad reductions in soil erosion, particularly on land that is not subject to HELC, researchers have doubts about the role of HELC in leveraging soil conservation gains. Broad-based soil erosion reduction may suggest that the timing of erosion reduction relative to HELC was largely coincidental. That is, soil erosion reductions might have happened even without the Compliance requirement.

To test this theory, ERS researchers used a statistical model to compare soil erosion on cropland in fields subject to HELC (known as HEL fields) to similar cropland not in HEL fields. …

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