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Crop Insurance Subsides are Contributing to Massive Wildlife Habitat Loss in the US

More than 23 million acres of grassland, shrub land, and wetlands lost in past three years, says new report

Crossposted from Environmental Working Group

High crop prices and unlimited crop insurance subsidies contributed to the loss of more than 23 million acres of grassland, shrub land and wetlands between 2008 and 2011, new research by Environmental Working Group and Defenders of Wildlife shows.

corn field Photo by Patrick CainReplacing wetlands and grassland with crops such as corn and cotton also has secondary effects,
polluting nearby rivers and lakes by eliminating buffers that filter farm runoff and increasing the use
of fertilizers and chemicals.

Of the 23.7 million acres, more than 8.4 million were converted to plant corn, more than 5.6 million to raise soybeans and nearly 5.2 million to grow winter wheat.

Over the three-year period, 11 states had habitat losses of at least 1 million acres each, and a total of 147 counties lost at least 30,000 acres each. Notably, the losses were greatest in counties that received the largest amounts of federal crop insurance subsidies.

Many of the wetlands and grasslands being destroyed to grow crops serve as habitat for important wildlife species.

According to the U.S. Department of Agriculture, widespread destruction of grassland is threatening the survival of the swift fox as well as putting at risk species including sage grouse, the lesser prairie chicken, whooping cranes and mountain plover. Many of these species are in decline but not protected under the Endangered Species Act, and the rapid pace of habitat conversion could accelerate the need to bring them under federal protection.

Many wetlands and grasslands are also critical habitat for migratory birds. In the Dakotas, more than 3.2 million acres of habitat were destroyed between 2008 and 2011. Experts also estimate that 1.4 million small wetlands in the eastern Dakotas, which are especially important for breeding ducks, are at high risk of being drained. If they were to dry up, the number of breeding ducks could decline by 37 percent, according to the predictions.

Replacing wetlands and grassland with crops such as corn and cotton also has secondary effects, polluting nearby rivers and lakes by eliminating buffers that filter farm runoff and increasing the use of fertilizers and chemicals. From 1965 to 2010, use of nitrogen fertilizer on U.S. corn crops nearly doubled to 140 pounds per acre, according to USDA. Without wetlands or grasses to filter runoff, much more of those nutrients wash into streams, ultimately polluting waterways, destroying fisheries and increasing the cost of purifying drinking water.

Because crop insurance reduces the financial risk of planting on marginally productive land, heavily subsidized insurance policies encourage farmers to plow up environmentally sensitive wetlands and grasslands, studies show.

But these subsidies are not only a threat to wildlife and the environment; they also take a heavy toll on American taxpayers.

A decade ago, USDA paid 30 percent, on average, of the cost of crop insurance premiums. In order to encourage more farmers to buy the insurance, Congress in 2000 dramatically increased the subsidies for farmers, from less than $2 billion in 2001 to $7.4 billion in 2011. Today, USDA pays, on average, 62 percent of farmers’ premium subsidies and lavishes $1.3 billion on insurance companies and agents who sell the policies. At current rates, taxpayers can expect to send another $90 billion to farmers and insurance companies over the next decade.

Unlike traditional farm subsidies such as the now-discredited direct payments, crop insurance subsidies are not subject to payment limits, means testing or  conservation requirements. USDA also does not disclose the names of growers who collect crop insurance subsidies or the amounts they receive – in contrast to direct payments.

EWG analysis recently showed that 26 unidentified policyholders received more than $1 million each in premium subsidies. More than 10,000 farmers received more than $100,000 each in premium subsidies.

The new report by EWG and Defenders of Wildlife underscores the need for Congress to require growers to implement basic environmental protections as a condition of receiving federal crop insurance subsidies and to reject cuts in voluntary conservation programs in the federal farm bill. Recent polls have shown that farmers largely accept the need for these conservation requirements.

The outcome of current efforts in Congress to reauthorize the farm bill remains in doubt, leaving uncertain the fate of the massive legislation that sets the direction of federal agricultural and nutritional policy every five years. The full Senate and the House Agriculture Committee have each approved competing versions, and both would expand bloated crop insurance subsidies while cutting voluntary conservation programs by more than $6 billion over 10 years.

The Senate version, however, includes an important “conservation compliance” provision to require growers who accept crop insurance subsidies to take steps to protect wetlands, grasslands and soil health on their land.

As Congress struggles to complete work on the 2012 farm bill, legislators should make conservation compliance a condition of receiving crop insurance subsidies, place limits on who can receive subsidies and how much they can receive, and reject cuts to voluntary conservation programs. Simple reform to crop insurance subsidies could generate enough savings to avoid cuts to federal nutrition assistance and conservation programs.

Scott Faber
Scott Faber is Vice resident of Government Affairs at Environmental Working Group.He leads a team working to improve food and farm legislation, chemicals policy and a host of other issues important to EWG and its supporters.

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