Agriculture home

Part I: Subsidies and alternatives

Part II: The Conservation Reserve

Part III: Explorations in Europe

A modest step toward green payments

Some farmers do good things for the environment just because they feel like it. That seems to be the case with Art Thicke. (That's Thicke at the top of this page. I featured him in a recent piece on NPR.) He turned his corn fields into pasture and rotates his cows among 40 different sections of that pasture to avoid overgrazing. Birds love those pastures, and Thicke loves to watch the birds.

But farming is still a business. When people in rural towns talk about successful farmers, they mean farmers who make lots of money and keep their farms looking clean and neat, not those who raise nice broods of meadowlarks. And helping the environment can cut into your profits.

This field is a few miles from Thicke's farm. When it rains, soil runs into the Root River, just below.

Economists have terms to describe this sort of situation, where profit-seeking destroys a public good. And they have solutions. Typically, it involves putting a price on that public good, like clean water or wildlife habitat, so that farmers can earn money "producing" it, just like a regular crop.

As it happens, American farmers already get billions of dollars from taxpayers - around $24 billion this year. But what does that money pay for? A cleaner environment? Not really. About 10 percent of it funds "conservation" programs, mainly the Conservation Reserve Program, but 90 percent just helps keep farmers in business. (And many will argue that the subsidies don't even do that, but that's a different argument.)

In fact, many of those subsidies actually encourage farmers to do things that harm the environment. Here's how Minnesota farmer Dave Serfling described the problem to a congressional committee.

This is partly because the subsidies encourage farmers to grow more crops - thus encouraging them to use more fertilizer or pesticides and devote more land to production - and partly because of which farming activities get subsidies. Farmers get subsidies for growing cotton, corn, soybeans, rice, and wheat. They do not get subsidies for pasture, or hay, or hedgerows, or for cutting back on their use of fertilizer and pesticides.

Well, they didn't up to now.

In 2002, Congress established a new environmental subsidy program called, confusingly, the Conservation Security Program, or CSP. It's not the sole conservation program aimed at "working lands," but it's the most ambitious. (For the economically minded, here's a report from the USDA's Economic Research Service on all such programs.)

The program has been slow getting off the ground. This spring (2005), farmers in 220 different watersheds around the country (here's a map) could apply for funding under the program. Each year, the USDA plans to make it available to a new batch of farmers, so that within eight years, each farmer will have a chance to get a small slice of the pie. 

The groups who pushed for this program, though, aren't completely happy with how it's being handled. (Those groups include the Sustainable Agricultural Coalition, the Land Stewardship Project, the American Farmland Trust, and the Environmental Working Group.)  For one thing, the application process relies heavily on records of what farmers have done in the past, rather than what they could do in the future. If farmers can't produce results of soil testing, or records showing that they've kept their chemical spraying within reasonable limits, they're out of luck. And they won't have a chance to re-apply for another eight years.

In addition, many environmentalists are worried that the people running this program aren't demanding much from farmers. Farmers who keep all their land in row crops like cotton or soybeans can get funding even though such farms are inherently more biologically barren and subject to soil erosion than farms with lots of permanent pasture or woodland.

Statistics from the first year of CSP show some odd anomalies. In some counties, most farmers who were accepted into the program was awarded the top level - Tier 3 - of funding.  That's for farmers who are doing a truly superior job of providing habitat for wildlife and protecting water supplies. In other counties, very few farmers got to that top level.

And then there's the question of money. What will it take to really make a difference? According to Dave Serfling, it'll take more than the CSP can offer right now.

The CSP only accounts for about one percent of all farm subsidies. But what if 20 percent of the money paid for environmental improvements? Fifty percent? A hundred percent?

Some farmers would love that. Ranchers and vegetable farmers, for instance, don't get much taxpayer money right now, but they could under a system of environmental payments. Other farmers, though, particularly cotton and rice farmers, would fight any such shift to the death. Their crops are, by far, the most heavily subsidized.

In the past, such political battles have been won and lost within the farm-friendly confines of Congress's agricultural committees. There, many different farm interests have a voice. But the rest of the country doesn't. There isn't likely be any fundamental shift in the goals of US farm subsidies as long as that's the case.