The Institute for Agriculture and Trade Policy promotes resilient family farms, rural communities and ecosystems around the world through research and education, science and technology, and advocacy.2105 First Avenue SouthMinneapolis, Minnesota 55404 U.S.A.Tel.: (612) 870-0453Fax: (612) 870-4846iatp@iatp.orgiatp.orgagobservatory.orgtradeobservatory.orgJim Harkness, President© 2007 Institute for Agriculture and Trade Policy. All rights reserved.About this publication A Fair Farm Bill for ConservationWritten by Dennis Keeney, Mark Muller and Heather Schoonover, IATP Environment and Agriculture ProgramPart of a series on the 2007 United States Farm BillPublished July 2007IATP thanks the McKnight Foundation for their generous support of our policy work on the Farm BillCover: Artwork based on a poster for the Works Progress Administration, Illinois WPA Art Project, circa 1936-1940. For the Prairie States Forestry Project, Lincoln, Nebraska. By J. Dusek. Library of Congress, Prints and Photographs Division, WPA Poster Collection, LC-USZC2-815 DLC.3I�titute for Agriculture and Trade PolicyINTRODUCT I O NThe landscape of the upper Midwest is one of the most altered in the world. Iowa, for example, ranks last of all states in public lands and has lost almost all of its native prairies and wetlands.1 Much of the Midwest landscape is in row crops, dominated by ubiquitous corn and soybean. This came about from a progression of technologies, markets and national and state farm policies. Instead of promoting a diversity of crops that generate more ecological benefits, most public re-search and policy initiatives have focused on expanding the uses of the same row crop commodi-ties. The recent emphasis on corn-based ethanol, for example, may further reduce crop diversity by shifting land out of hay, grazing, and conservation set-aside programs and into corn.This row crop dominated landscape correlates with high rates of soil erosion, overabundance of nutrients in waters, loss of biodiversity, and rural depopulation with a subsequent economic col-lapse of rural communities. Farms have become larger, while farmers have declined in number.2This paper analyzes the effectiveness of agricultural policy for providing clean water, healthy lakes and rivers, and enhanced biodiversity. We summarize the influences of technology, market devel-opment, and historic policies that have influenced the agricultural landscape. Finally, using data collected from a survey of farm policy experts, we recommend ways that the 2007 Farm Bill can better enhance conservation benefits while lowering taxpayer costs.4A Fair Farm Bill for Co�ervationCONSTRAINTS ON AGRICULTUREAgriculture is a high-risk enterprise. Just as in previ-ous generations, changing markets, plant diseases, insects, and especially weather give farm planners pause when making cropping decisions. However, unlike previous generations, farm income is subject to greater vola-tility because many farming regions specialize in just a few crops or livestock. Poor corn yields or low corn prices, for example, are devastating for Iowa farmers because so much of their farm’s economic viability is based on corn produc-tion. Further, chronic overproduction of corn and other feed grains often leads to prices below the costs of producing and harvesting the crop.Yet the farmer is offered few alternative production models that provide an adequate economic return while assuring protection of the long-range environmental and social goals desired for agriculture. Farmers have used many approach-es to minimize risk and increase income, such as expanding acreage, mechanization, irrigation, high-yielding varieties, and the liberal use of fertilizers and pesticides. Policymakers have attempted to address these farm income and economic risk issues through agricultural payments, opening interna-tional markets through trade agreements, and subsidies for irrigation, storage and transportation. These policies that drive down commodity prices have actually been more ben-eficial to agribusiness than to farmers, as they substantially reduce the cost of purchasing commodities for confinement livestock, sweeteners, edible oils and other food products.THE STA RT O F C ONSERVATION IN THE FAR M BI L LThe economic collapse from 1929 to 1940, often re-ferred to as the “Great Depression,” devastated the U.S. farm sector. Farm income declined by more than half and dropped much faster than urban incomes. To address the economic crisis, President Franklin Delano Roosevelt, with the guidance of Iowa native and Secretary of Agriculture Henry A. Wallace, introduced the first farm bill, the 1933 Agricultural Adjustment Act (AAA).Wallace focused on creating policy mechanisms that re-stored commodity prices, and he believed that managing the domestic supply of commodities provided an effective method of raising prices and getting more cash into agri-cultural communities. The AAA farm programs were effec-tive at raising farm income, very popular and placed some requirements on farmers to reduce production and set-aside some acreage. The program was funded by a tax on com-modities, but the Supreme Court declared the program unconstitutional, and President Roosevelt had to develop another method of revitalizing rural agricultural communi-ties. This was when the government entered into conserva-tion contracts with farmers.The first conservation initiatives were designed to get around the tax issue through the Soil Conservation Act of 1935. The Soil Conservation Service (SCS) was created, and the legislation had strong public support because of the disastrous affect on agriculture caused by the Dust Bowl. The funding was significant (See Table 1 below). In con-stant dollars, nearly twice as much funding was available for conservation programs in 1937 as in 1999.TA BLE 1. CONSERVATION E XPE N D I T U R ES ( I N M I L L I O NS O F C O N STA NT 19 96 D O L L ARS )3Year 1937 1999 Ratio, ’37/’99 Financial assistance$5,041.7 $231.4 21.8Technical assistance$261.9 $799.6 0.32Land reserve$17.7 $1,711.2 0.01Total$5,321.2 $2,742.1 1.9CO N S E RVATION PRO G R A M S E X PAND, FAC E CHRO N I C F U N D I N G C H A LLENGESWorld War II and the ensuing Cold War result-ed in a substantial shift in agricultural policy, partly in response to new international pres-sures and opportunities. Farm
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