Climate Change in the 2015 Federal Budget and Farm Bill

Monday, March 17, 2014

The U.S. federal budget proposal for fiscal year 2015 was released on March 4th with climate change playing a more substantial role than it has in the past. Much of the funding for climate resilience comes from a new Opportunity, Growth and Security Initiative that allocates $56 billion dollars overall, including $1 billion for a Climate Resilience Fund that will support research to understand the impacts of climate change and help communities plan for those impacts. While $1 billion is only a fraction of the total money in the budget, the acknowledgment of climate change as a real entity with tangible consequences is a definite step forward.


The specific dollars for climate resilience are peppered throughout the budget and spread across many federal departments. Some examples include funding to the Department of Agriculture for regional climate hubs, researching resilient crop production techniques and investing in renewable energy; funding to the Department of Commerce for improving coastal resilience to severe weather events; funding to the Department of Energy for developing clean energy and analyzing infrastructure vulnerabilities; funding to the Department of the Interior for expanding the U.S. Geological Survey to monitor, research, and analyze climate resilience; and funding to the Environmental Protection Agency for supporting the President’s Climate Action Plan to reduce carbon pollution. Although this list is not exhaustive, it displays the pervasiveness of climate change throughout the entire budget.


While the money in the 2015 budget indicates progress towards climate change adaptation and mitigation, funds in the federal budget are discretionary and can easily change from year to year. The Farm Bill, on the other hand, provides mandatory funding that is recurrent each year and is more difficult to change. Although the Farm Bill does not mention climate change directly, it contains numerous initiatives that focus on reparations and risk management as a result of the erratic weather indicative of climate change. The Livestock Forage Disaster Program, which became a permanent program in the newest Farm Bill, insures producers against climate-caused damages by compensating livestock producers who experience grazing losses due to drought or fire, both of which are increasing in frequency. There are also more climate related practices included in the conservation programs.  However, the most notable and far away the most expensive programmatic response to climate change in agriculture is the crop insurance program.


The USDA crop insurance programs provide risk mitigation to farmers for crop losses and for times when they are unable to plant due to weather and climate issues.  The USDA provide generous subsidies for farmers to pay private company crop insurance premiums (up to 60%), and these policies are backed up by the U.S. government.  IATP, like many other groups, have real concerns about how the crop insurance program as implemented to date encourages production on less productive and often more environmentally sensitive land.


Recognition of a problem is the first step towards solving that problem, but in the case of agriculture and climate change, not taking immediate action is extremely costly from economic and environmental perspectives. Even though current Farm Bill initiatives recognize the impacts of climate change, they have failed to encourage adaptation as a less costly and longer term safety net. Even with the changes that have been introduced to the crop insurance program – including conservation compliance requirements and broadening of the program to include more organic and other non-commodity crops – it is still more reactive than proactive policy.  Relying on programs that compensate for losses without requiring the adoption of more stringent conservation practices to prevent the same disaster happening again costs billions of dollars each year.


These programs aren’t helping farmers in the long run, either. Crop insurance compensates at market prices, so in times of high commodity prices, farmers receive high insurance payments when crops don’t grow. However, as commodity prices drop, crop insurance will not pay enough for farmers to live on. Instead, it will give them enough income to try again next year. The problem is that trying again the next year with the same practices will only yield the same results – decreased production due to a cocktail of droughts, floods, pests, and extreme temperature. Crop insurance without mandatory conservation requirements perpetuates a cycle of low income for farmers, unproductive land, and high costs for taxpayers. The only entities benefitting are the insurance agencies and the agribusinesses that produce the seeds and chemicals that today’s predominant farming system are so reliant upon.


Many of these problems are a result of the Farm Bill’s genesis as a damage control tool. The Farm Bill was never intended to fix the root causes of crop damage; it was intended to patch up problems as they occurred. If we are not willing to adapt the entire philosophy behind the Farm Bill to one that recognizes more than monetary risk, we will continue to waste taxpayer dollars and support a farming system that lacks resilience and security for farmers. We need to swiftly move towards a system that not only acknowledges climate change, but encourages on-farm practices that build soil health and water holding capacity so that farms can survive – or even thrive - in the face of extreme weather events.


There are some pieces of a more holistic approach in the Farm Bill, but they are not nearly robust enough. For example, the conservation compliance provisions in the Farm Bill “require farmers to meet a minimum standard of environmental protection on environmentally sensitive land as a condition of eligibility for many Federal farm program benefits, including commodity and conservation program benefits or a Farm Service Agency loan,” according to the National Sustainable Agriculture Coalition. These provisions are the bare minimum we need to stop the increased erosion and destruction of native grasslands and wetlands, but not nearly enough to deal with the impacts of a changing climate. Reducing climate-related risk could also be achieved by expanding the working-lands conservation programs already in the Farm Bill, namely CSP and EQIP. Instead, the newest Farm Bill cut CSP to limit enrollment to 10 million new acres per year - a cut of 22%. CSP and EQIP are both currently voluntary programs, but if participation in these programs or adoption of farming systems that address more whole farm conservation were mandatory requirements for farmers to receive insurance payments, there would likely be less reliance on insurance payments overall. 


Thankfully, we’ve moved past the question of whether climate change is happening. However, we are now using the federal budget and the Farm Bill to pay for billions of dollars of damage control that could be avoided if we instead focused on farm resilience and adaptation. As we look to our future farm policy and what we know we are facing from climate change, we need to go beyond the farm bill to holistic policies that can help us become more resilient and prepared.