Now more than ever, government spending should be scrutinized to ensure that taxpayer dollars are being spent wisely and targeted toward the most effective and efficient federal programs. Numerous federal agricultural policies – including conservation programs – could achieve more public benefits at lower cost if taxpayer dollars were better prioritized and similar programs were consolidated. While the 2014 farm bill consolidated certain agricultural conservation programs, more can be done to save taxpayer dollars, prioritize spending toward initiatives with measurable outcomes, and streamline programs for better short- and long-term results.

Cost Savings Achieved through Accountability Standards

Taxpayer dollars can also be saved by creating more cost-effective, accountable, transparent, and responsive agricultural conservation programs, and a more accountable farm safety net in general. Reform proposals listed below, if implemented properly, could save taxpayer dollars and put current funding toward projects with better a return on investment.

(1) Cost-effective

• Eliminate duplicative and wasteful subsidies:  With numerous conservation programs striving to achieve similar goals, taxpayer dollars could be saved if similar programs were streamlined and consolidated even further than reforms that were achieved in the 2014 farm bill. Perverse incentives in commodity and crop insurance programs that work at cross-purposes with conservation goals should also be eliminated.
• Allow agribusinesses to compete for federal conservation funding:  If applicants for working-lands and set-aside conservation programs were allowed to competitively bid for conservation program funding, taxpayer dollars could achieve more benefits at lower cost.  While competitive bidding is no longer allowed in one of the largest working lands programs – the Environmental Quality Incentives Program (EQIP) – the program historically achieved greater return on investment when this practice was allowed.  Bidding, in addition to utilizing fewer and more advanced environmental benefits indices (to streamline programs and reduce administrative costs), should be implemented to achieve additional cost savings.
• Allow agribusinesses to assume more risk:  Instead of shifting nearly all risks onto taxpayers, agribusinesses should assume more of their own business risks. Numerous conservation risk management options exist, like installing grassed waterways to reduce flooding risks and planting cover crops to minimize soil erosion.
• Target spending toward the most cost-effective projects with the best return on investment:  To achieve full cost-effectiveness, conservation payments must be targeted to areas most in need and to practices with the greatest measurable impact, including partnerships within the 2014 farm bill’s new Regional Conservation Partnership Program. But overall, if projects were first screened for land characteristics – for instance, climate, topography, soil type, likelihood of runoff, and proximity to waterways – taxpayer dollars could be spent more wisely.  Alternatively, when all states receive a minimum amount of EQIP funding (through regional equity provisions in the 2002 and 2008 farm bills), conservation programs generate less public benefits.
• Only pay for additional conservation practices:  Instead of paying agribusinesses to implement conservation practices that they would employ on their own, either as routine business practice or in response to reasonable health and welfare regulations, millions of taxpayer dollars could be saved by only paying for additional practices that produce measurable public benefits and reduce downstream and future costs of the agriculture industry’s impacts.

USDA Economic Research Service (ERS) researchers found that only paying for new conservation practices “achieves 12 times the improvements in environmental performance” as compared to paying agribusinesses for something they were already doing.  ERS also estimates that a performance-based system paying only for additional conservation practices would result in 14 to 15 percent less nitrogen leaching and phosphorus runoff, up to 21 percent less soil and wind erosion, up to 300 percent greater soil productivity gains, and nine percent less pesticide leaching.  Since some conservation programs such as the Conservation Reserve Program (CRP) and Conservation Stewardship Program (CSP) pay for practices that would have been employed anyway and EQIP pays for some normal business costs that should be borne by agribusinesses themselves, taxpayer dollars could be better spent on additional conservation practices.

(2) Accountable

• Limit market intrusions of agriculture subsidy programs:  Subsidy programs should not distort agricultural markets, perpetuate unintended consequences, inflate land prices, alter planting decisions, or promote excessive risk taking at taxpayer expense. Subsidies shouldn’t incentivize agribusinesses to plant crops on marginal lands where success is unlikely and that would likely not be cultivated without subsidies.
• Meet minimum accountability standards:  Agribusinesses must use conservation best management practices in exchange for any taxpayer support. Rotating crops, conserving wetlands, using conservation tillage practices, and other time-tested industry-standard means should be employed to reduce downstream costs of agricultural pollution, conserve land for future generations, and reduce taxpayer liabilities. While the 2014 farm bill took some positive steps toward ensuring that farmers conserve land in exchange for taxpayer subsidies, more must be done to ensure these provisions are implemented and monitored properly and reflect on-the-ground realities.
• Achieve measurable results:  Taxpayers have a right to know which federal conservation programs are achieving measurable results. Agricultural programs must have improved performance measures and metrics so that spending can be prioritized.
• Target subsidies to the needy:  Federal taxpayers cannot afford to dispense conservation payments to the wealthiest or most profitable agribusinesses and landowners. More reasonable limits and stricter definitions on which agribusinesses qualify for subsidies must be utilized to ensure that federal programs do not work at cross-purposes or unintentionally incentivize consolidation of agriculture. Currently, the EQIP payment limit is $450,000, far more generous than the previous payment limit of $40,000 for direct payments, for instance.
• Eliminate corporate welfare subsidies:  Corporate subsidies that place taxpayers in the position of covering the expected and inevitable costs of business decisions should be eliminated (such as mitigating pollution caused by large animal feeding operations). Businesses must be accountable for the inevitable ramifications of their business decisions. Currently, 60 percent of EQIP funding is allocated toward livestock producers, primarily to clean up manure from large animal feeding operations.

(3) Transparent

• Make conservation programs transparent:  Conservation program spending, in addition to all other agriculture subsidy programs, should be transparent and publically available in an easily accessible and understandable format. Outcomes of conservation programs should also be made known to taxpayers making short- and long-term investments to reduce long-term liabilities such as water pollution or soil erosion. 

(4) Responsive

• Eliminate special interest subsidies and parochial programs:  Provide an adequate and appropriate agricultural safety net that provides public benefits rather than special interest subsidies and parochial programs. Taxpayers cannot afford to insulate individual agricultural businesses from the physical and market conditions impacting their operations, such as protecting individual waterfront resorts from flood risks through the Emergency Watershed Protection Program.

Conclusion/Recommendations

Lawmakers should prioritize conservation program funding toward the most cost-effective, accountable, transparent, and responsive conservation programs. Additional steps should be taken to eliminate farm subsidy programs whose goals run counter to those of agricultural conservation programs. Then, program funding should be targeted to areas most in need and initiatives with the greatest return on investment without paying for agricultural practices that agribusinesses already employ with their own dollars. These simple reforms will not only help spend taxpayer dollars more wisely but will also save the federal government money in both the short- and long-term.

For more information contact Joshua Sewell, josh at taxpayer.net.

Read More:

The Path to Trillion Dollar Farm Bills (updated)

Web of Special Interests Influencing New Taxpayer Subsidized Crop Insurance Policies

Just the Facts about Corporate Subsidies in the 2014 Farm Bill (pdf)

Just the Facts about the Farm Bill and Spending on Crop Insurance and Disaster Aid (pdf)