In a new blog post, our friend Daren Bakst at the Heritage Foundation argues against returning to the Reagan administration policy of linking federally subsidized crop insurance to conservation compliance measures.
Bakst argues that denying federal crop insurance subsidies to farmers who drain wetlands and cultivate sensitive lands without plans to stop erosion is bad policy. The two policies ought remain disconnected, Bakst says, because “crop insurance is designed to minimize risk to farmers,” while conservation compliance “is designed to protect the environment.” He adds that the policy of conservation compliance “does not respect the fact that farmers, not the federal government, are the best stewards of their land.”
Both of these arguments are deeply flawed.
It’s simply not the case that conservation compliance and crop insurance have different purposes. Both serve to manage risk. Environmentally sensitive wetlands and prairies are exactly the same areas where farmers are most likely to lose their crops. If purely private companies underwrote crop insurance, they would either demand far higher premiums to insure these areas or they would decline to write coverage at all. Thus, if one wants to scale back the federal subsidies and move in the direction of a private market—a goal R Street and Heritage share—returning to the Reagan administration policy makes sense.
This isn’t a trivial consideration. There are major challenges to privatizing the National Flood Insurance Program in the short term precisely because it has written so much coverage in areas that the private sector simply won’t touch. Failing to link conservation compliance to subsidies could likewise make it impossible to privatize crop insurance, in that farmers will continue to be encouraged to plant in areas the private sector would never insure at prices that farmers could afford.
Furthermore, Bakst implies a “right” to crop insurance subsidies that simply does not exist. While individual farmers are better stewards of their own land than Washington paper-pushers, this doesn’t mean these same farmers have any inherent right to taxpayer support. Under current conservation compliance programs, farmers who don’t want to follow the rules are free to decline the subsidies. No one will prevent them from disposing of their land as they see fit with their own money. No business is “entitled” to have its activities subsidized, particularly when those activities are both inherently risky and harmful to the environment.
Bakst is right to call for “setting caps on the premium subsidies that farmers can receive and reducing the percentage of premium subsidies currently paid for by taxpayers.” Frankly, we’d rather see these subsidies eliminated altogether. But insofar as crop insurance supports exist, returning to the Reagan-era policy (also known as, “don’t subsidize dumb things”) is a step in the right direction that deserves conservatives’ wholehearted support.