Plans to rely heavily on crop insurance as America’s primary food security system in the next farm bill could be in trouble after the New York Times laid out some simple dynamics in a lengthy article Wednesday (South Dakota figures heavily in the reporting, and South Dakotans are quoted):
By guaranteeing income, farmers say, crop insurance removes almost any financial risk for planting land where crop failure is almost certain. …
(O)nce-marginal land is selling for nearly $2,000 an acre, up from about $300 in 1991, as the high crop prices drive the need for more areas for farm production.
In short, some farmers are planting on any ground they can find. No matter if the crops stand a slim chance of growing. Crop insurance will pay, and handsomely given the current commodity market.
The losers? Wildlife habitat, hunters/anglers and the American taxpayer. (CRP payments are pitiful compared to what an acre of cropped land would bring.)
South Dakota’s entire congressional delegation has for months touted crop insurance as the great hope for the future, a market-based system that moves the nation away from direct payments. It sure sounded good when they said it.
Then last week, Rep. Kristi Noem promoted her new bill incentivizing farmers to maintain wildlife habitat. It could help, but it doesn’t feel like a complete solution.
In the unending search for the perfect American farm program, crop insurance appears to at least need some tweaking. And while it’s hard to call farmers “damned if you do, damned if you don’t” given the recent run of high prices, this conundrum has me feeling somewhat hopeless.
Looking at the sky and waiting for rain must feel almost like one is in control compared to looking towards the Beltway hoping for answers.