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By Jeff Schahczenski, NCAT Agricultural and Natural Resource Economist

If you had to allocate $3.3 billion of taxpayer dollars to farmers and ranchers who voluntarily wish to change how they farm and ranch so as to “deliver conservation solutions” to protect natural resources and feed a growing world, how would you do it?

This year, the USDA Natural Resources Conservation Service (NRCS) will allocate this sum to applicants of two working-lands conservation programs, the Environmental Quality Incentive Program (EQIP) and the Conservation Stewardship Program (CSP) largely by the means of a new tool called the Conservation Assessment Ranking Tool (CART). On September 17 and 24, and October 8, NRCS and NCAT will present a webinar series that will help farmers and ranchers more fully understand how the CART will assess and rank their applications to these programs.

In the past, farmers and ranchers have accessed these programs to achieve significant improvements in the protection of natural resources and the environment. For example, Montana organic grain farmers Doug and Anna Jones-Crabtree, who began farming 11 years ago, have for 10 years fully utilized CSP and EQIP to great advantage. This year, they have again applied for the CSP and are anxious to hear this fall how they will be ranked by CART. As Anna relates, “through the CSP, we undertook practices such as improved nutrient management, pest management, flex-cropping, cover crop, field borders, and seeding pollinator species.”

But despite the efforts of farmers like Doug and Anna, there are many questions and inherent complications as to how one could and should compare the relative conservation efforts of farmers and ranchers nationwide. Some broad but important questions that need answering, and which will be explored in this webinar series, include the following:

  • Who decides what conservation efforts are of a higher priority than others?

All of us probably have our own ideas about how best to conserve natural resources, limit negative environmental consequences of farming and ranching, and promote the important environmental services that agriculture provides. For example, improving soil health has been a topic of great interest nationwide. Can a tool like CART assure or improve soil health? The simple answer is yes, if embedded within the CART efforts to improve soil health are prioritized.

The more complex answer is that not all farmers and ranchers in every U.S. county view soil health as the primary objective for conservation at the moment. Indeed, the NRCS tries to allow for farmers and ranchers, at local and state levels, to have some input into what they view as most important. However, since we also live within a federal system of government, Congress and the President (through the USDA) have a say, as well. Thus, not surprisingly, a given farmer or rancher in a given state will not be ranked and assessed by exactly the same criteria, nor will their personal priority for conservation solutions assure them of support.

  • Can the best science direct the best conservation solutions?

To continue with our example of soil health, how do we know how best to improve soil health? Does the CART support the best science-based means to assess soil health? Again, the simple answer is that one hopes so, but what is known or not known about how to improve soil health is still very much an open question. In the last session of the CART webinar series, we will explore this very complex issue.

  • What are the best conservation solutions to best serve the public good?

There are some farmers, ranchers, and agricultural and conservation organizations who have had philosophical issues with the very intent of working-lands conservation programs. For example, the CSP concept of rewarding farmers and ranchers for their ongoing conservation efforts is fundamentally different from all other federal conservation programs. Some have argued that if farmers and ranchers are already providing these benefits without public support, then why use scarce public resources to continue these efforts? Others have argued that good stewardship by farmers and ranchers provides a public good or investment. It is argued that we all benefit from these stewardship efforts, and that public incentives are required for continued good stewardship of the land and—more importantly—to encourage those who do not provide these public benefits to consider them. These issues—like many others in our democratic system—strike at the broader issue of the proper role of government engagement in protecting both the environment and the future productive capacity of our natural resources.

By Jeff Schahczenski, NCAT Agricultural and Natural Resource Economist

I have been awakened to a re-evaluation of risk and uncertainty. Going to the grocery store has – hopefully only for a short time – become more risky.  I also have been thinking more and more about how are personal and societal understanding and measurement of uncertainty is changing. It is more risky to go to the grocery store because of the increased level of uncertainty that we will arrive home healthy. Have these changes in risk and uncertainty brought on by this pandemic impacted the need and desire to re-examine crop insurance?

Federally subsidized crop insurance fundamentally address two categories of risk. First, there is production risk, which derives from the uncertainty of yield related to the disruption of the normal growth of crops and livestock as affected by weather, disease, pests and other factors. This is the historic and most common form of crop insurance referred to generally as “multi-peril” insurance. This risk does not seem likely to be largely impacted by the pandemic.

The other major risk category is called price or market risk and is caused by the uncertainty of what the price of the product will be at the time it is produced and ready for sale. This risk also sometimes includes the uncertainty of the costs of the inputs needed to produce the product since this risk is also market-based. These risks will likely be impacted significantly by the pandemic.

Fortunately, at least for a major proportion of agriculture producing major commodity crops such as corn, soybeans, wheat, and cotton, there is widely available revenue protection which covers both production (yield) and market (price) risks. Unfortunately, there are also many types of crops and livestock products for which revenue insurance is not available at all or not available in the county in which the farmer farms. For example, in California in 2019 only about 1,600 of a total of 32,590 policies sold were revenue-based, leaving much of California agriculture without protection related to market or price risk.[1]

The exception to this case is the unique policy known as Whole-Farm Revenue Protection (WFRP), which does provide revenue protection based on the historic revenue history of a whole farm rather than a specific crop or livestock product. Though available nationwide, this policy has not been widely utilized because of several factors which NCAT and others have been working to improve. Nonetheless, if price or market risks continue to rise over the next few years, WFRP may become an option to consider for the many producers of crop or livestock products for which revenue insurance is not available.

Quarantine

Another word that has entered our lives forcefully is quarantine. In federal crop insurance the definition of quarantine is very specific and in most cases unless specifically added to a policy (called an endorsement) it is not an insurable cause of loss and thus generally not covered under most policies. RMA defines[2] quarantine as specific action taken by a public authority for a specific pest that:

  • Requires the destruction of your insured crop or the plants on which your insured crop is growing; or
  • Does not permit the insured crop to be harvested, sold, transported, transferred, or otherwise restricts it from movement from the location where it was produced to the location of any buyer.

Fortunately COVID-19 virus is not a pest that has led to crop or livestock related quarantines, but the consideration of this topic is becoming more important for future public policy consideration.

Adjustments to Date

As of the date of writing, the U.S. Dept. of Agriculture Risk Management Agency (RMA) has made some adjustments to the normal process of acquiring crop insurance for the 2020 production year. For the most part these adjustments have been to encourage movement toward avoiding actually meeting with your crop insurance agent. Since the closing sales dates for most crop insurance products has passed, the adjustments are being made to delay the delivery of important paper work such as filing of documents such as production reporting requirements, written agreements (a special policy option), and, importantly, payment of premiums. For details see the RMA website under the What’s New link (https://www.rma.usda.gov/News-Room/Whats-New) or call or email your crop insurance agent.

Stay Tuned for a Different Future

When life changes rapidly we have hopes to return to a sense of stability but we also usually learn new ways to adapt and even change the structure of our lives. Crop insurance, like all insurance, is a function of our personal and public common risk aversions. Some of us are gamblers, some of us are not. And the general idea of pooling our resources to protect against risk is in part the essence of insurance, if not of government in general.

Visit our ATTRA website for some resources to explore or re-explore the risky business of farming and ranching and the role crop insurance might play in your future success.

[1] Source: Risk Management Agency, Summary of Business accessed on March 30, 2020.

[2] Source: RMA, Quarantine Endorsement Pilot  at https://legacy.rma.usda.gov/policies/2011/11-qe.pdf

By Jeff Schahczenski, NCAT Agricultural and Natural Resource Economist


American farmers are stepping up to demonstrate that agriculture can be an important part of the climate solution by improving the resilience of America’s food system, reducing emissions, and facilitating on-farm production of renewable energy. Now, thousands of U.S. farmers and ranchers have signed a joint letter calling on partners in the private and public sector to help advance these solutions and invest in our rural and agricultural communities.

One farmer who signed onto the letter is Nina Prater, a soil health specialist for the National Center for Appropriate Technology (NCAT) and a farmer in Cedarville, Arkansas. “As a farmer, I understand first-hand how intricately my livelihood—and the entire system of food production—is tied in with nature. Climate change is throwing all natural patterns out of order, and this disrupts our ability to produce food in an economically viable way. Farmers are uniquely positioned to help solve the problem of climate change through soil carbon sequestration,” Prater said.

NCAT encourages other farmers and ranchers to add your name to the letter. There is a version in English and a version in Spanish. You can read the letter at these links and add your name.

Montana farmers Doug and Anna Crabtree. Photo: Courtesy of Vilicus Farms

Montana farmers Doug Crabtree and Anna Jones-Crabtree. Photo: Courtesy of Vilicus Farms

In November 2019, NCAT agriculture economist Jeff Schahczenski co-authored a major report on agriculture and climate change that identified federal policy initiatives that would support farmers who are committed to being part of the climate solution. The report, published by the National Sustainable Agriculture Coalition, identifies policy opportunities to:

• build soil organic matter, soil health, and agricultural resilience;

• sequester C in soil and above-ground biomass;

• reduce greenhouse gas emissions;

• use resources sustainably; and

• maximize energy conservation.

NCAT is working with NSAC and its 116 member groups to make sure farmers have a direct voice in the national conversation about climate solutions in agriculture. In just a few months, more than 2000 farmers and ranchers from nearly every state have signed the letter. We have been overwhelmed with the response and want to build on this momentum!

If you are a food producer, please add your voice by April 15. Email addresses and contact information captured through the Google forms document will not be shared, sold, or retained by NSAC or any other party. Click here to read the letter and add your name.

Later this spring, NCAT, NSAC and partner groups will share this Farmer Letter on Climate Change in meetings with members of Congress, USDA program leaders, and other key decision-makers to urge effective policy action to combat climate change, and especially to help farmers and ranchers weather the storm and lead the way towards a more resilient future.

If you have any questions about the letter, contact Jeff Schahczenski at jeffs@ncat.org.