agricultural act of 2014 conservation compliance and crop insurance march 12, 2014 bruce knight scs...
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Agricultural Act of 2014
Conservation Compliance and Crop Insurance
March 12, 2014
Bruce KnightSCS
Bill WenzelIWLA
Sam WillettNCGA
Agricultural Act of 2014Conservation Compliance Background Broad agreement among agriculture,
crop insurance and conservation groups Support for relinking conservation
compliance with crop insurance premium subsidies
Oppose Adjusted Gross Income test for crop insurance
Agreement included in final law
Agricultural Act of 2014Conservation Compliance Background Removal of direct payments Crop insurance increasing role as
primary farm safety net Need for strong farm and natural
resource safety net More defensible for taxpayer
Agricultural Act of 2014Conservation Compliance + Crop Ins. Addresses conservation of two
fragile lands Highly Erodible Land (HEL) Wetlands
Involves 3 USDA agencies Farm Service Agency, Natural
Resources Conservation Service, Risk Management Agency
Conservation Compliance and the 2014 Farm Bill
March 12, 2014 Strategic Conservation Solutions
Agricultural Act of 2014
Conservation Compliance
Enacted in 1985 Farm Bill Linked Farm Program Benefits to
management of certain fragile lands
Estimated that compliance accounts for 25% of the soil loss reduction between 1982 and 1997
Highly Erodible Land (HEL) requires a conservation plan.
Wetlands can be farmed, but cannot be drained.
Conservation Compliance 1985 – linked conservation compliance
to crop insurance and farm program benefits
1990 – expanded wetlands coverage, expanded linkage to conservation programs, penalties modified to fit the violation
1996 – crop insurance was decoupled, provisions to allow a producer one year to come into compliance
2014 – conservation compliance again linked with crop insurance subsidies, as well as all programs within the commodity title (Title I)
Benefits Linked to Compliance in the 2014 Farm Bill
Disaster Payments Conservation Programs Farm Storage Facility Loans Production Loans from USDA Marketing loans Crop insurance premium subsidies Both the Agricultural Risk Coverage and
Price Loss Coverage options (which replaced direct payments)
STAX: Stacked Income Protection for producers of upland cotton
Swampbuster Enforcement (Farm Programs)
Filling, draining, dredging or leveling of wetlands prohibited after 1990.
Farming of wetlands under natural conditions is allowed.
Drainage of uplands and prior converted wetlands is allowed.
Minimal effects and mitigation is allowed.
No graduated penalties for intentional violations
Farmer Impact
Fear of increased regulation Fear of regulatory creep Compliance cost is actually low
and relatively easy for most farmers
Uncertainty about crop insurance eligibility
Uncertainty about changes in linkage to compliance
Implementation
Conservation compliance is forward looking from February 7, 2014 (date of enactment)
While farmers will be able to sign up for programs under the new Farm Bill for the current crop year, rules tying conservation compliance to eligibility for crop-insurance subsidies go into effect with 2016 crop year.
Rules and Regulations
Crop insurance compliance will be developed by FSA, RMA and NRCS
No significant changes are necessary for “traditional compliance”
Released in 2014 Implemented in 2015? Impact the 2016 crop year in the
case of crop insurance.
How Big is the Issue?
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110
100
200
300
400
500
600
700
Total Number of Violations (Wetlands + HEL)
Total
Producer Impacts of Enforcement
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Requested Benefits
2899333.8
3
4714544.5
5
3656949.7
3
8680982.66999999
13631132.
29
14002863.
95
17136231.
26
14105044.
21
8735237.9
1
24208093.
58
16819391.
7
15949596.
78
9636901.5
5637745.2
8
6388643.0
5
7527664.3
9
6936664.1
Reinstated Benefits
1817978.1
3
3420131.9
2810599.1
6
7332965.1
3
13219814.
24
13221090.
16
15212725.
25
12858989.
46
8026627.2
5
23048420.
22
14809946.
81
14955027.
21
8685864.0
5
4596745.8
5527939.8
2
6442161.4
3
5825217.9
$2,500,000.00
$7,500,000.00
$12,500,000.00
$17,500,000.00
$22,500,000.00
$27,500,000.00
Producer Benefits Influenced by Compliance Vio-lations
Producer B
enefi
ts ($)
Conclusion
Compliance is still not a “gotcha program”
If you were in compliance in the past - no change.
If you were out of compliance in the past – decisions to be made.
Coalition efforts and cohesiveness will be important to help guide the regulatory process.
Bruce KnightStrategic Conservation
Solutions50 F Street, NW Suite 900Washington, D.C. 20001202-879-0801 (office)202-213-3887 (mobile)bknight@stratconserve.com
CONSERVATION COMPLIANCE AND CROP INSURANCE
Premium Subsidy Eligibility
Highly Erodible Lands (HEL)
Agricultural Act of 2014
Conservation Compliance
Number one priority for most conservation groups
Compliance is main source of protection for farmed wetlands and highly erodible land (HEL)
Credited with protecting an estimated 3.3 million wetland acres and 140 million HEL acres
93% of producers in compliance
Compliance - Highly Erodible Land
Requirements of 1985 Farm Bill largely unchanged
Producers receiving farm program benefits who are farming land prone to erosion must develop and implement a conservation plan
Producers must file an annual certification of compliance (AD – 1026)
Changes to HEL RequirementsAgricultural Act of 2014
Producers subject to compliance for first time have 5 years to develop conservation plan
NRCS will give priority to new producers who need assistance in developing and implementing conservation plans
There are no clawback provisions for premium assistance repayment for violations
Ineligibility for premium assistance only after Final Determination of violation
IWLA Social Media Channels
Facebook:www.facebook.com/iwla.org
Twitter: @IWLA_orghttps://twitter.com/IWLA_org
Conservation Compliance and Producer Perspective
Agricultural Act of 2014
Agricultural Act of 2014Conservation Compliance – Producer Perspective Forward looking application of
regulations and penalties Premium assistance cannot be
withdrawn in year of violation No clawback on previous year’s
assistance regardless of appeals process Compliance required to restore premium
assistance for future crops
Agricultural Act of 2014Conservation Compliance – Producer Perspective Tenant Protections
No liability for land owner refusal to meet requirements
Grace Period for newly covered farmers Five years for HEL and wetland
compliance Two years for producers who drain
wetlands to begin mitigation
Agricultural Act of 2014Conservation Compliance – Producer Perspective Whole Farm subject to ineligibility
in the event of violations Current allows wetland conversion
with mitigation Question remains regarding impact
on a producer’s other farms
Questions?
www.farmland.orgwww.nacdnet.orgwww.iwla.orgwww.ncga.com
Agricultural Act of 2014
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