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Image of farm.

Everyone's Farm Bill

Agriculture provides a foundation for the state's economy. Federal farm policy influences our state's agriculture—offering incentives to plant certain crops, to plow, not to plow, and to practice conservation.

by Brian DeVore

Can public policy have a split personality? Yes. This becomes clear while standing on a strip of ground that marks the boundary between two southwestern Minnesota farms. On one side of the fence, a diverse mix of grass and woody vegetation covers the rolling acres of a grass-based beef cattle operation. Across the property line are rows of newly sprouted corn poking out of otherwise bare soil. The row-crop field offers no cover for wildlife. During a dry spell, winds could send soil into the road ditch and eventually the Minnesota River a mile away.

Helping Farmers Give Back

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The Farm Bill Assistance Partnership helps farmers tap into federal programs to develop habitat and conserve soil, water, and other natural resources. Since 2002 this partnership of the DNR, the Minnesota Board of Water and Soil Resources, soil and water conservation districts, and Pheasants Forever has helped enroll more than 368,000 acres in short- and long-term protection programs for grasslands and wetlands.

In addition, the Working Lands Initiative develops local partnerships between farmers, conservation groups, soil and water conservation districts, the DNR, and the U.S. Fish and Wildlife Service. Today, 12 locally led teams in more than 20 counties have helped farmers establish grasslands that can be grazed while providing nesting for birds. They have put in place controlled drainage systems to provide temporary waterfowl habitat. The teams also help farmers find government funding to support conservation practices.

Subsidies at the Supper Table

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Lack of diversity on the landscape translates to lack of diversity on our supper tables. Ever wonder why a two-liter bottle of pop costs about $1.99 and a gallon of organic milk $5.99?

"Organic farm products are much more linked to the market-based supply and demand system," says Jim Riddle, organic outreach coordinator for the University of Minnesota's Southwest Research and Outreach Center. "They are competing against a highly subsidized system."

For example, of a Twinkie cake's 37 ingredients, at least 14 are federally subsidized products such as high-fructose corn syrup, according to the U.S. Public Interest Research Group. Between 1995 and 2010, $16.9 billion in tax dollars subsidized such food additives. In contrast, apples received only $262 million in subsidies during that same period. If these subsidies went directly to consumers, residents of Minneapolis would have enough money to buy almost 3.5 million Twinkies but only 39,000 of the more costly, less-subsidized apples.

Both land uses are shaped by federal farm policy. "It definitely pulls you in two different directions—no doubt about it," says Darrel Mosel, who has a 600-acre crop and livestock farm further down the Minnesota River valley.

Over the past three-quarters of a century, nothing—not markets, weather, nor advances in agronomic science—has played a more consistent role than federal farm policy does in determining why a particular acre of farmland is growing corn instead of grass or other soil-friendly crops like hay and small grains, according to Ferd Hoefner, policy director for the National Sustainable Agriculture Coalition.

Today, half the land in Minnesota is farmed, and at least 70 percent of the state's farmers are enrolled in federal farm programs. This means agriculture has a tremendous impact on the state's land and water. And farm programs have enormous influence on the land-use choices farmers make.

Most federal farm and food policies are guided by the farm bill, which comes up for renewal every five years. Congress is now considering changes in the 2008 farm bill. The bill currently favors planting corn, soybeans, and other so-called commodity crops and offers far less incentive for conservation practices. Nevertheless, some Minnesota farmers are choosing land-use practices that prevent erosion, protect water quality, and provide wildlife habitat.

Farm Policy Roots Modern farm policy was launched in the 1930s as a helping hand for farmers wracked by the double catastrophe of the Great Depression and the Dust Bowl. The chief architect was Henry A. Wallace, a seed corn pioneer, Depression-era agriculture secretary, and Iowa native who sought financial support for producing certain crops such as corn. He saw government support for raising commodities as a way to ensure an "ever-normal granary." Since then, federal farm policy has evolved into an amalgam of subsidies, disaster payments (crop insurance), cost-share funds, and loan guarantees. Despite the many reiterations it's undergone, at its core, farm policy has stayed true to what Wallace wanted: producing lots of a few crops and lots of one in particular.

More than 70 percent of the crop subsidies Minnesota farmers receive go to support corn. No wonder Minnesota farmers planted almost 9 million acres of that crop this year.

"In the Midwest we are children of the corn," says Steven Taff, an economics professor at the University of Minnesota. "We really, really, really know how to grow corn. The farm bill has been a great success at supporting that."

This wholesale conversion of land to corn, soybeans, and other row crops is taking a toll on the natural habitat of the prairie pothole region of Minnesota, South Dakota, North Dakota, and Iowa. Intensive production of row crops has led to declines in grassland bird populations that are steeper and more consistent than declines seen in any other North American group of birds over the past quarter-century, according to the National Wildlife Federation.

Minnesota's number one farmland conservation initiative is the federal Conservation Reserve Program, which is part of the farm bill. CRP pays more than $100 million annually to Minnesota farmers in return for planting perennial cover crops on roughly 1.5 million acres. Since the early 1990s, CRP grassland habitat has increased the number of ducks in the prairie pothole region of Minnesota and the Dakotas by 2 million a year, according to the U.S. Department of Agriculture.

However, contracts covering around 850,000 acres in Minnesota will expire during the next five years (300,000 acres this fall alone). Farmers will re-enroll some of that land, but market forces and farm policy favor plowing and planting commodity crops.

"If we lose those acres, that will have a dramatic landscape impact in the state," says Bill Penning, Department of Natural Resources prairie habitat team supervisor.

Unintended Consequences The argument could be made that, because corn's average per-bushel price has almost tripled to around $6 in the past few years, market forces now govern why so much corn is being raised in Minnesota. But high corn prices are rooted in farm policy soil. For more than three decades, the government encouraged corn ethanol production through a tax credit given to energy producers, and farmers responded. Ethanol consistently competes with livestock feed as the biggest user of corn grown in this country.

Ethanol's rise led to one of the unintended consequences in farm policy. Darrel Mosel, who farms in south-central Minnesota's Sibley County, says he originally invested in a local ethanol plant as a way to market excess corn. But he and other early supporters of the industry never foresaw how it would not only gobble up surplus corn but also drive farmers to plant every last acre to the crop.

"There is a place for ethanol, but we weren't proactive and didn't look at what the impact of raising the price of corn would be," he says, describing a recent rainstorm that eroded row-cropped land in his area. "We can grow corn, but we can do it in a way that is more environmentally sound. We don't need to plant fencerow to fencerow."

Another unintended consequence has emerged from the crop insurance program, meant to keep farmers from being financially devastated by weather-related disasters. To increase participation in the program, in 1996 the government dropped the requirement that farmers use basic conservation measures in order to qualify for insurance payouts. Thus, the crop insurance program removed the economic brake on plowing up land—much of it set aside in CRP—once considered too wet, erosive, or otherwise marginal to produce a decent crop.

Targeting Conservation Between 1995 and 2011, federal farm bill programs such as direct payments and crop insurance provided $13.45 billion in subsidies to Minnesota farmers growing corn, soybeans, and other commodity crops. During the same period, the programs paid $1.96 billion to farmers to implement conservation practices.

In 2006 Darwyn Bach, who raises 520 acres of corn and soybeans in southwestern Minnesota's Yellow Medicine County, used cost-share money from the federal Environmental Quality Incentives Program to convert from moldboard plowing, which exposes topsoil to the elements, to mulch tillage. The mulch system protects the soil by leaving plant residue from the previous year's crop on the surface. Because it requires specialized equipment and involves a learning curve, Bach had to hire someone to do his mulch tillage while he transitioned into the system.

Bach also qualified for $7,182 per year for five years from the farm bill's Conservation Stewardship Program because he agreed to initiate conservation practices such as applying chemicals precisely and widening the grassy buffers that guide water runoff within and between his row-cropped fields. However, he had to spend $10,500 to make his spraying equipment more precise and to update his planter. Bach says the changes have been worth the time and money spent. He feels better about how he's raising his crops, and he can see the conservation benefits. After spring rains he used to have to go out and fill in newly formed gullies. Not anymore.

Bach also feels practicing conservation on his farm is a way of giving back to the taxpayers who fund farm programs. Another way he's done this is by enrolling 40 acres in CRP on odd corners of his farm. These are areas too wet or rocky to consistently produce a good crop. The CRP acres are now home to waterfowl, pheasants, and deer.

"I think the taxpayer should see benefits from the support they give farmers. It should be expected," he says, sitting in his dining room bedecked with white-tailed deer racks.

A Little Wildness Taff of the University of Minnesota says the key is to provide farmers some economic incentive—either through government subsidies or the marketplace—to take on the risk of adopting and maintaining the kinds of farming systems that protect water quality and wildlife habitat but aren't necessarily lucrative at first.

Sometimes, what starts out as a subsidy can evolve into a market-based reason to keep a little wildness on the farm. Remember that southwestern farm with the mix of shrubs and grass next to the cornfield? It's owned by Audrey Arner and Richard Handeen, who put 41 acres of marginal land into CRP in 2000. Over the years they've used cost-share funds from the federal Natural Resources Conservation Service to establish on that CRP ground wildlife-friendly plantings of hazelnut, elderberry, high-bush cranberry, and other native species.

"Without CRP it would have been harder to put so much of our acreage into set-aside," says Handeen, who raises grass-fed beef cattle on 240 acres. "In hindsight, it's more of a sacrifice than we realized with current crop prices."

Those high crop prices loom large as the farmer considers that the CRP contract comes up for renewal in 2015. However, those wild acres nicely border the farm's rotationally grazed pastures, providing a buffer against water runoff and wind that can erode soil. It's also frequented by pheasants, deer, and at last count 90 different bird species. The natural habitat on this farm has become a key selling point for Arner and Handeen, who market their beef directly to consumers and restaurants.

"The thing I notice when I visit the farm is the amount of bird life and the number of insects, which are a key part of the wildlife food pyramid," says Dave Trauba, who oversees DNR wildlife operations in Big Stone, Lac qui Parle, and Swift counties. "You don't see that everywhere."

Even if it doesn't stay in CRP, that land could easily be rotationally grazed while maintaining wildlife habitat, and there is a potential market for products such as hazelnuts, which can't be sold while the land is enrolled in the government set-aside program. In other words, those 40 acres of perennial plants have become an integral part of the farm's economic and ecological fabric, whether it's the government or the marketplace that provides the financial stitching holding it together.

"We won't be plowing it up," Handeen says without hesitation.

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