Don't mess with federal crop insurance, farmers say. Others aren't so sure

Some experts say time is ripe to drop the carrot and pick up the stick.

August 8, 2022 at 9:44PM
Farmfest attendees gathered last week to watch ABC Drones of Rochester demonstrate how drones can be used to selectively spray crops. (Glen Stubbe, Star Tribune/The Minnesota Star Tribune)

From field hearings in Morton buildings to sweet corn feeds at county fairs, farmers have been practicing a refrain this summer: Hands off the federal crop insurance program.

The mantra was loud, too, last week at Minnesota's Farmfest as negotiations on the once-every-five-years federal farm bill inch closer.

"If it isn't broken, don't fix it," U.S. Rep. Michelle Fischbach, a Republican from western Minnesota, told the Farmfest crowd in Redwood County. "We don't want to add on a variety of things and put requirements and stipulations on it."

But just in case the message was not clear enough, agriculture industry representatives kept up their reminders.

"The real important thing to our members is to make sure crop insurance survives the way it is," said Scott VanderWal, who farms across the border in South Dakota and is vice president of the American Farm Bureau Federation. "The bumper sticker message on crop insurance is: Do no harm."

Federal crop insurance dates to the 1930s, shielding farmers against losses because of weather ravaged crops with government-subsidized loans. Later programs expanded protections against declines in commodity prices, from corn to soybeans to cotton.

By 2015, fully 85% of the fields growing the nation's staples were enrolled in some form of crop insurance, a total liability exceeding $100 billion.

But to hear increasingly anxious ag industry players talk, under a Democratic administration, the programs are set to undergo reconstructive surgery as farm bill negotiations get underway this fall with an eye toward the climate.

Already, some changes are afoot. A few months into the Biden administration last year, Agriculture Secretary Tom Vilsack announced a $5 premium on insurance policies for farmers planting cover crops.

Over the weekend, Democrats in the Senate squeaked through the Inflation Reduction Act, which would send $40 billion to popular, voluntary agriculture initiatives such as the Conservation Stewardship Program, which pays farmers with working lands to restore grasses or develop wildlife habitat.

USDA officials — including Robert Bonnie, undersecretary for farm production and conservation, who appeared in Vail at a sugar industry symposium earlier this month with former Minnesota congressman Collin Peterson — often say any climate policy change must be voluntary and farmer-friendly.

But some argue it might be time for a different tack.

"It is largely untouchable, but it's possible to sneak in some incremental change," Anne Schechinger, Midwest director for the Environmental Working Group, said on Monday. "But it is supported by lots of people, Democrats and Republicans alike."

Earlier this year, Schechinger authored a report calling for crop insurance reform, saying the program inexplicably incentivizes — with taxpayer dollars — some of the riskiest farming, given the increase in intense weather events.

"It's not just that farmers emit greenhouse gases," she said. "But farmers — probably more than any other industry — are going to have to deal with the consequences of climate change the most."

For a generation or more, climate-smart agriculture practices have gained marginal strength. A 2017 USDA study of nearly 2,000, corn farmers in the north central region who grew cover crops saw a 3% boost to yields. In 2020, researchers at Michigan State University found that no-till fields — compared with conventional tillage — saw yields increase over 30 years of records.

But the approaches have not gained a foothold as conventional practices.

According to 2017 USDA Farm Census records, only 2% of Minnesota farmers plant cover crops. While roughly 5,800 farms that year used no-till practices on at least some parcels of land, nearly 23,000 farms relied on intensive tilling.

All this happens as an increase in temperatures accelerates.

Last summer's drought dried up rural water wells at a rate unseen in Minnesota. This season, delayed planting because of wet and cold conditions saw wheat fields empty until May. Nationally, a summer heat wave in the Pacific Northwest in 2021 resulted in nearly 800 deaths. Globally, heat waves this year have pummeled India and Europe. One study of excess deaths in Germany counted more than 3,000 casualties.

The conventional wisdom appears to be that wielding federal crop insurance eligibility to induce sustainable practices would be a no-brainer.

Industrial agriculture is a major driver of climate change, accounting for 11% of the nation's production of greenhouse gases. Meanwhile, the USDA has distributed $4 billion in relief checks to farmers impacted by wildfires, droughts, hurricanes and other winter storms between 2020 and 2021.

With the upcoming farm bill — what Schechinger dubs the "climate farm bill" — some environmental groups see an opportunity to hardwire practices that dramatically preserve soil (and carbon) in the dirt.

"It doesn't need to be punitive necessarily," said Sarah Goldman, policy analyst with the Land Stewardship Project, who has called for a cap on payments to the largest farms and for the USDA to more formally endorse alternative farming practices. "Crop insurance is just really doing the opposite of what it was intended to do."

A recent paper in the Journal of Policy Modeling reports that over 20 years between the early 1990s and 2010s, the number of small family farms across five states, including Minnesota, decreased as crop insurance participation increased. Crop insurance, the argument goes, encourages monocropping and discourages adaptation.

Many farmers, however, see any tinkering with their practices as a violation of their public-private partnership with the federal government. Hitching crop insurance eligibility to green practices, they say, is equivalent to requiring a farmer to drive a Prius or a Tesla in order to get automobile insurance.

Richard Syverson, a farmer from Pope County and the first vice president of the Minnesota Corn Growers Association, spoke at a congressional field hearing in Northfield last month and talked about the reverberating waves of activity that crop insurance touches off throughout a local economy.

"Crop insurance, in a roundabout way, backs up the economies of our small, main street businesses," Syverson said.

Last Tuesday at Farmfest, Kaden Donnay, a sales rep with Ziegler Ag Equipment, talked to customers in the shadow of a combine, noting the price of a new unit went up 12% — roughly $90,000 — in a single day in July. The biggest slowdown in the fields, he said, comes on parts designed to decrease emissions. But he still sees momentum toward greener farming.

"You're going to see a lot more strip tilling and then regenerative farming and cover cropping," Donnay said. Farmers are responding to the carrot, he said, opting for healthier practices to boost soil quality or to reduce the need to apply costly fertilizer. But he acknowledged the stick looms.

"Eventually, they're going to be told to."

A potential customer — Justin Klassen, who farms corn, soybeans and raises beef cattle near Mountain Lake — said he understands farmer resistance toward mandated change.

"Farmers are fiercely independent people," Klassen said. "They don't like people telling [them] what to do."

But he also acknowledged that with the growing age of farmers and the mood of the country, a shift in federal policy seems imminent. He just wants it to be collaborative.

"If we could find a better way for the government to give us a better overall picture of what they're aiming for and what we want to do and then ask us to participate," Klassen said, "it would go a huge ways toward solving some of these things."

about the writer

about the writer

Christopher Vondracek

Agriculture Reporter

Christopher Vondracek covers agriculture for the Star Tribune.

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