Salatin’s book
Everything I Want to Do Is Illegal details the many ways that the federal government saddles farmers with excess paperwork, regulations, and bureaucracy. He thinks this burden is, at least in part, facilitated by big agricultural producers who have the staff and funds to meet heavy regulatory demands. Big farms set high barriers of entry for small ones, making it difficult for operations such as Salatin’s to compete.
Whether it’s subsidies, crop insurance, federal regulations, or even conservation programs, says Salatin, there is often a “prejudice against scale.” In a centralized system of regulation and control, diversity makes standards more difficult to enforce. But to dispense with variation is not just detrimental to land, animals, and community; Salatin also believes it hampers new farmers, because “innovation starts embryonically, creation starts small.”
Federal insurance programs traditionally come in two forms: yield and revenue insurance. The USDA’s Risk Management Agency (RMA) formulates insurance policies, sets premium rates, and subsidizes the cost for farmers and insurance providers. But big businesses often receive larger subsidies, rewarding powerful and politically connected farming operations over small family farms. “There have been a series of policy decisions at the federal level that have greatly influenced where we are today — where farms are larger, there are fewer family farms, and fewer vibrant rural communities,” Paul Wolfe of the National Sustainable Agriculture Coalition told me.
One particularly bad culprit is the harvest price option (HPO) crop-insurance policy. While traditional crop insurance protects farmers from catastrophic losses, those who can afford higher premiums buy an HPO policy. Traditional crop insurance pays farmers when the price at harvest is less than projected prices at planting. But HPO policies guarantee that farmers will be paid
eitherthe projected price at planting time, or the market price at harvest — whichever is higher. “This product goes above and beyond the definition of a safety net,” wrote the R Street Institute, a libertarian think tank, in a letter to Congress last year. “It is the crop insurance equivalent of your auto insurer surprising you with a new Cadillac Escalade after you’ve totaled your Toyota Corolla.”
Craig Cox, the senior vice president for agriculture resources at the Environmental Working Group (EWG), says the HPO is less an insurance policy than a price support. “The odds are very high they’re going to make money,” says Cox. “The rate of return in some instances was 300 or 400 percent. With crop insurance, we’re subsidizing so much normal business risk, you can make decisions to expand, buy, or rent more land, without having to worry about risk that would normally make you think twice, or make you diversify your crops.”
Those who oppose the Farm Bill (of which the HPO is one component) cross party lines, forming unexpected partnerships. The EWG joins libertarian-leaning groups such as The R Street Institute and Taxpayers for Common Sense in opposing current agricultural policies. Their reasons are ecological, economic, and political: Crop insurance is bad for the land and also bad for the taxpayer. In 2012, the harvest price option boosted payouts to corn and soybean farmers by $6 billion — money that comes from the federal government and thus from the pockets of average citizens. “The overwhelming cost is borne by us,” says Joshua Sewell, a policy analyst for Taxpayers for Common Sense. “We also bear the cost of the crop-insurance companies, as well as the cost of loss when it occurs. It’s a triangle of waste.”
Catherine Cochran, press secretary for the U.S. Department of Agriculture, acknowledged that because of the way USDA programs function, “more funds go to larger farms,” and perceptions of a disparity in coverage “may not be totally false.” However, she also pointed to efforts the department is making to reach out to smaller growers, such as their microloan initiative and “Whole Farm Revenue Protection” (WFRP), a measure introduced in the 2014 Farm Bill. In contrast to more conventional crop-insurance policies, WFRP offers greater security to smaller, diversified farm producers.
This year, President Obama proposed $9 billion in cuts to the USDA budget — cuts that focus in on crop-insurance programs such as the HPO policy. It’s impossible for the budget to entirely eliminate the Harvest Price Option plan, but Obama’s proposed cuts would drastically trim the federal funds that undergird it. In a
joint press release, the R Street Institute and National Taxpayers Union joined Friends of the Earth U.S. and the EWG in applauding these budget cuts.