So in one sense, conservation compliance can be viewed as a type of social contract reached between the public and farmers. In exchange for giving farmers some protection from the economic vicissitudes of life — crop failure and chronic low prices — the public is requiring that farmers leave wetlands untouched and engage in conservation practices on HEL.

With the elimination of direct payments almost a certainty — either in the next farm bill or other legislation — some (too many) farmers might decide to jettison participation in the farm program altogether, freeing themselves from conservation compliance and other farm program rules.

Under the bill proposed by the House in 2012, those farmers could continue to buy existing federally subsidized crop insurance without being subject to conservation compliance. Not so, in the 2012 bill proposed by the Senate.

 

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But there are other alternatives. For example, the aforementioned social contract between the public and farmers could be terminated. Then farmers could decide if converting wetlands to crop production or reverting to traditional farming practices on HEL is worth paying 100 percent (or some other large percentage) of their crop insurance premiums on all of their crop production rather than the federally subsidized 38 percent that they pay now.

The “public” would no longer receive the benefits of conservation compliance on the converted acres. But neither would the public would be paying for benefits they do not receive.

Of course, if doing away with conservation compliance meant dropping out of the farm program, farmers would also forgo any other government aid should crop prices drop well below the cost of production.

Daryll E. Ray holds the Blasingame Chair of Excellence in Agricultural Policy, Institute of Agriculture, University of Tennessee, and is the Director of UT’s Agricultural Policy Analysis Center (APAC). Harwood D. Schaffer is a Research Assistant Professor at APAC. (865) 974-7407; Fax: (865) 974-7298; dray@utk.edu and hdschaffer@utk.edu; http://www.agpolicy.org.

 

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