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GAO: Payments, insurance lead to sodbusting

A new Government Accountability Office study says farm program payments and federal crop insurance have played a major role in the opening up of new farm land in the upper Midwest.

Prohibitions on the plowing up of more grassland are already the subject of the new “sodsaver” language in the House-passed farm bill, but the study could lead to even more far-reaching legislation in the Senate version of the law, activists say.

“We need to have farm policy that protects farmers from the vagaries of economic and weather cycles, but also protects the environment from unintended consequences like encouraging crop production on land that should remain in conserving uses,” said Iowa Sen. Tom Harkin in his weekly press conference with ag reporters.

“Rising prices for commodities are creating powerful incentives to put marginal acres into crop production. So the need for federal policy to actively promote good conservation on working land is greater than ever.”

Harkin, chairman of the Senate Agriculture Committee, has been pushing for more funding for conservation programs in the new farm bill although the lower budget baseline for the new legislation requires the Senate Finance Committee to find offsets for such spending.

One eyebrow-raising finding of the GAO study is that between 1982 and 1997, 1.69 million acres of cropland in South Dakota were enrolled in the Conservation Reserve Program and converted to grassland. During the same period, the study says, South Dakota farmers plowed up 1.82 million acres of grassland for new cropland.

Harkin and House Agriculture Committee Chairman Collin Peterson, D-Minn., requested the GAO study after hearing reports farmers were converting more grassland to crops than into conserving uses.

“This report confirms what I've been hearing in the region about the conversion of marginal land into cropland,” said Peterson. “The farm bill has to balance the demand for land in production with the equally important goals of conservation, and this report points out the need to constantly re-evaluate and improve federal policy on these issues.”

The GAO found that crop insurance, in particular, is motivating conversion by greatly limiting the risk of producing crops in areas that are considered to be marginal as far as producing crops.

For example, in the 16 South Dakota counties with the highest rate of conversion, the average net crop insurance payment was more than $13 per acre, nearly twice the payments received in all other counties in the state, according to the GAO.

The study says conversion of grassland with no cropping history disproportionately adds to the cost of federal disaster payments. From 1998 through 2004, 40 percent of South Dakota's disaster payments went to the 16 counties with high conversion rates. These 16 counties received nearly $200 million in disaster payments in that seven-year time period.

Grassland, and particularly native grassland, is a vital part of the American landscape, according to conservation groups.

“Over the last three centuries, half of the native grassland making up 1 billion acres of land in the United States has been converted to human usage, most of which has been to cropland,” said Ferd Hoefner, policy director for the Sustainable Agriculture Coalition.

“Despite this trend and the significant value of native grasslands, there is no comprehensive data on grassland conversion to cropland or the amount of farm program payments related to newly converted cropland.”

Hoefner said the GAO study highlights the situation in South Dakota, but environmental groups such as the Sustainable Agriculture Coalition believe the situation is widespread in the upper Midwest.

“Land retirement programs such as the Conservation Reserve Program and the Grasslands Reserve Program are intended to protect marginal land, but the study finds that farm program payments, growing ethanol demand, new technology and GMO crops have driven farmers to convert more marginal land into cropland,” he notes.

“These incentives, added to lowered risks from crop insurance and commodity program payments, have made it profitable for farmers to farm on marginal or previously unsuitable farmland while raising the overall costs of farm payments to U.S. taxpayers.”

For that reason, Hoefner and other environmental advocates have argued that current farm policy has “one foot on the accelerator and one foot on the brake.

“We subsidize conversion of grassland to cropping and then attempt to offset the loss through the Conservation Reserve and Grassland Reserve. As good as those programs are, they have trouble keeping up with subsidies and force the taxpayer to pay a second time to try to preserve the resource. Then when the subsidized new cropping on marginal land fails to produce, the taxpayer is called upon a third time to provide disaster payments.”

Farm programs need to be made more consistent, instead, says Hoefner. “The Senate overwhelmingly approved sodsaver in 2002 only to see the provision stripped from the bill by House conferees,” says Hoefner. “This time, the House has adopted a limited version of sodsaver and the pending Senate conservation title includes full-blown sodsaver provisions.”

The “sodbuster” and “swampbuster” provisions of current law prevent producers from receiving farm program payments if they break out highly erodible soils or wetlands or fail to apply conservation practices to prevent erosion to those lands.

But the GAO study says the “sodbuster” provisions have had little success in conserving grasslands because much of the grassland in the Northern Plains is not considered highly erodible land and does not come under payment restrictions.

The report also quotes USDA Natural Resources Conservation Service officials who say that for lands under the highly erodible land protection, the cost of controlling soil erosion is low relative to the potential profits from $4 corn and $8 wheat.

Wildlife enthusiasts also are concerned about the impact the loss of grasslands is having on habitat for ducks and other game birds.

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