Federal crop insurance, which is saving many grain farmers from financial ruin during the worst drought in more than 50 years, is also subsidizing the conversion of grassland and wetlands to crop fields, according to a report by the Environmental Working Group and Defenders of Wildlife.
The “grass-to-grain” transition in the farm belt — exemplified by a 5.7 million acre reduction in Conservation Reserve Program grasslands from 2007 to 2011 — has long been evident as farmers have responded to an unprecedented era of high commodity prices.
The less-well-known role of subsidized crop insurance in such conversions was highlighted last week in the “Plowed Under” report.
“Because it reduces the financial risk of planting on marginally productive land, heavily subsidized crop insurance encourages farmers to plow up environmentally sensitive wetlands and grasslands,” said Scott Faber, one of the authors and vice president of Environmental Working Group.
The result, Faber said, is environmental damage — increased soil erosion, water pollution and lost wildlife habitat — that would not otherwise have occurred.
The report’s conclusions echo those of a study released in July by farm economists Daniel Sumner of the University of California-Davis and Carl Zulauf of Ohio State University.
“Evidence-based analysis supports that subsidized crop insurance encourages the movement of crop production onto marginal lands and can result in environmental risk that would not occur in the absence of subsidized crop insurance,” Sumner and Zulauf wrote in their report, “Economic and Environmental Effects of Agricultural Insurance Programs.”
About 62 percent of farmers’ crop insurance premiums are paid by taxpayers through the U.S. Department of Agriculture.
Recipients of crop insurance subsidies are not subject to payment limits, means testing or conservation requirements.
“I’m very worried that crop insurance is encouraging conversion of wildlife habitat and highly erodible land into crop production,” said Decorah area farmer Paul Johnson, a former director of the USDA’s Natural Resources Conservation Service and of the Iowa Department of Natural Resources.
Johnson acknowledges the need to support farmers. In exchange for that support, farmers should be required to adhere to responsible soil and water conservation practices, he said.
The authors of “Plowed Under” — Faber and Soren Rundquist of the Environmental Working Group and Tim Male of Defenders of Wildlife — assert that growers converted more than 23 million acres of grassland, wetlands and shrub land to commodity crops between 2008 and 2011.
Rundquist, a landscape and remote sensing analyst, said he used USDA satellite data, which he described as between 85 percent and 95 percent accurate, to formulate his estimates of acreage converted to cropland.
The study found that 11 states suffered habitat losses of at least 1 million acres each during the three-year period. Iowa ranked third, with a habitat loss of 1,505,202 acres — with 876,792 acres converted to corn and 625,127 acres converted to soybeans.
Texas, with 3,078,789 acres converted largely to winter wheat and cotton, and South Dakota, with 1,940,920 acres converted largely to corn, wheat and soybeans, ranked first and second, respectively.
Other million-acre states, listed in descending order, were Nebraska, Oklahoma, Illinois, Minnesota, North Dakota, Missouri, Kansas and Wisconsin.
Dave Miller, research director for the Iowa Farm Bureau Federation, acknowledged that acreage planted to insured crops has increased since 2008 but questioned the extent of that increase and the role played by crop insurance in the expansion.
“Given the worldwide demand for grain, the market is pulling reserve acres into production. That is a market response,” he said.
Faber said “it’s hard to tease out” which is the most influential factor — the market or crop insurance. “Both play a role,” he said.
David Osterberg, director of the Iowa Policy Project, said the subsidized insurance “is pushing farmers to go way farther than the market itself would.”
Miller also questioned the study’s methodology. “I don’t know where they get that 23 million acres,” he said.
USDA figures, which are based primarily on farmer surveys, are not directly comparable with satellite images from the USDA’s Cropland Data Layer, said Rundquist. The Environmental Working Group believes it is the most accurate measure of ground cover change based on available data, he said. Rundquist also noted that net acres insured for corn, soybeans, wheat and cotton increased from 188 million in 2008 to 203 million in 2011 — a 15 million acre increase consistent with the study’s main contention.
The study’s authors say widespread destruction of grassland is threatening habitats for the swift fox, sage grouse, the lesser prairie chicken, whooping cranes and mountain plover.
In Iowa, the leading casualty has been the Chinese ring-necked pheasant, whose population has plummeted during the past decade because of inhospitable weather and loss of habitat.