Productivity and Risk Management

Executive Summary

The commodities segment of the agricultural sector produces most of the nation’s agricultural products. Commodity producers face thin margins and often look to government support to maintain profitability. At the same time, the\ capacious production of this sector can mask persistent challenges, including the short-term stewardship of natural resources like water, the long-term health and productive capacity of soils, and threats to the vitality of rural communities. Producers need help to tackle these challenges for the sake of their businesses and the nation’s food security. Every five years, help arrives in the form of a new farm bill that updates existing commodities, conservation and crop insurance (CCCI) programs.

This report explores how CCCI policy can support broader notions of productivity and risk management that prioritize farmer livelihoods and natural resources health. Here, productivity sits at the nexus between the land’s capacity to sustain crops and animals over the long term, and the livelihood of the producers who make their living off the land. Risk management, on the other hand, addresses the potential to invest in resilient agricultural systems that reduce both on-farm financial risk and broader natural resource concerns. By considering CCCI initiatives together, Congress can improve productivity and risk management for the benefit of producers and the public.

Today, the agricultural sector faces similar challenges as it did in the 1930’s when the twin specters of the Great Depression and the Dust Bowl haunted rural areas and drove many producers to bankruptcy. In 2018, producers are again contending with the prospect of persistently low commodity prices. Soil remains a conservation priority even as new natural resource management challenges, such as water quality and climate change adaptation, are competing for scarce conservation dollars. The interactions between CCCI programs require producers to make agronomic and economic tradeoffs between programs, including which crops to plant, which agronomic practices to implement, and whether to put some of their acreage into retirement or under easement. The congressional budgeting process also links these programs. The sheer size of CCCI spending, accounting for 95 percent of 2014 Farm Bill spending outside of Nutrition, means that significant changes within any one of those areas will likely require cuts to others.

By addressing CCCI together it is possible to renegotiate a better bargain for producers and the public. Achieving this deal requires a candid assessment of the issues confronting the agricultural sector. Traditional environmental laws inadequately protect air and water quality from agricultural sources of pollution. In their place, Congress relies on CCCI incentives and voluntary conservation measures to mitigate environmental harms. New policy can better align the short-term interests of producers and the long-term health of natural resources. At the same time, efforts to increase productivity and improve risk management must include attention to disparities in wealth and the inequitable payment of federal benefits. Aligning private incentives with the public good requires that benefits are spread evenly throughout the agricultural economy and across the broadest base of producers.

This report focuses on goals and recommendations, including specific legislative changes, tailored to advancing these objectives within the next farm bill. The full report is part of a series. When considered in total they offer a dynamic and wide-ranging suite of ideas for the future of American agriculture and American eating. Other reports in the series address Diversified Agricultural Economies and Food Access, Nutrition, and Public Health. Given its distinctive breadth, the farm bill offers a unique opportunity to address the myriad challenges facing agricultural producers and their communities. These challenges may seem diffuse, but are entwined through the complex workings of our food and agriculture system. This report, like the others in this series, demonstrates how this essential interconnectivity offers opportunities to seize the farm bill as a tool to improve the lives of all Americans.

Acknowledgements

This report was written and produced by the following members of the Farm Bill Law Enterprise (FBLE): Duke Environmental Law and Policy Clinic, the Environmental Protection Clinic at Yale Law School and the Yale School of Forestry and Environmental Studies, and Harvard Law School Food Law and Policy Clinic.

The following students, staff and summer interns also contributed significant research and writing to this report: Drake Carden, Madeleine Daepp, Goliath Davis, Danielle Haley, Joshua Komarovsky, Nathaniel Leamy, Nathaniel Levy, Gregory Muren, Andrew Norkiewicz, Alexandra Smith, Stevenson Smith, and Jack Zietman, Harvard Law School Food Law and Policy Clinic; Sara Dewey, Paavani Garg, Liz Hanson, Claire Horan, and Jonathan Kim, Harvard Law School Emmett Environmental Law and Policy Clinic; Emily Kenyon, David Solimeno, and Renner Walker, Pace University Elisabeth Haub School of Law Food Law Initiative, Sarah Munger, Carrie Scrufari, and Emily Spiegel, Vermont Law School Center for Agriculture and Food Systems.

FBLE is grateful to the many individuals and organizations who enriched this report by sharing their time and ideas: Ken Ackerman, Chris Adamo, Jay Armstrong, Bruce Babcock, Art Barnaby, Sarah Carlson, Steve Carlson, Craig Cox, Rebecca Davis, Kasey Engel, Ryan Flichter, Tom and Sheryl Giessel, Justin Gilpin, David Heddy, Fred Iutzi, Wes Jackson, Anna Johnson, Renée Johnson, Rich Llewelyn, Jim Monke, Mark Nelson, Mark Rasmussen, Ann Robinson, Ryan Stockwell, Mykel Taylor, Jana Settler, Carolyn Van Meter, Sally Worley, and Carl Zulauf.

FBLE thanks the following people for reviewing this report and providing feedback. The reviewers do not necessarily concur with the report’s recommendations. Alyssa Charney (Senior Policy Specialist), Ferd Hoefner (Founding Member and Senior Strategic Advisor), and Paul Wolfe (Senior Policy Specialist), National Sustainable Agriculture Coalition; Jonathan Coppess, Clinical Assistant Professor, University of Illinois (formerly Director of USDA Farm Service Agency), Scott Faber, Adjunct Professor of Law, Georgetown Law Center and Vice President of Government Affairs, Environmental Working Group, Neil Hamilton, Professor of Law and Director, Agricultural Law Center, Drake Law School.
Report layout and design: Najeema Holas-Huggins, Harvard Law School Center for Health Law and Policy Innovation. Cover design: Roni Lagin, Roni Lagin and Co.

FBLE is indebted to Jody Freeman and the Harvard Environmental and Energy Law Program for their support and encouragement.

Finally, FBLE is grateful for the financial support of the Charles M. Haar Food and Health Law and Policy Fund, GRACE Communications Foundation, the Yale Law Journal Public Interest Fellowship, and two very generous Anonymous contributors.