The government could help farmers adapt to climate change by tying crop insurance premium subsidies or commodity program eligibility to the adoption of practices that can protect producers against drought, floods and other climate-related disasters, according to the Government Accountability Office.
GAO, the investigative arm of Congress, on Thursday released a set of 13 options for USDA and policymakers to consider for improving farmers’ climate resilience and reducing federal budget exposure to disasters.
In addition to tying the adoption of climate-related farming practices to crop insurance and commodity programs, other policy options include incorporating climate concerns into crop insurance rates and establishing USDA standards for “climate-resilient agricultural operations.”
The recommendations are based in part on interviews with various experts in agriculture and climate, several of whom told GAO that establishing standards for “climate-resilient” farms could “effectively provide clear direction to producers on what practices are climate resilient. In addition, some experts said that this option could build off of the lessons learned from USDA’s organic certification program, which may make it easier to implement.”
The 13 policy options also include suggestions that USDA collect data on practices that improve climate resilience, expand technical assistance to promote climate resilience and prioritize climate resilience in whole-farm conservation planning.
GAO said it developed the options at the request of two members of the House Appropriations Committee, Chellie Pingree, D-Maine, and Andy Harris, R-Md. Harris became chairman this year of the Agricultural Appropriations Subcommittee, which writes USDA’s budget.
GAO acknowledged that the “appropriate mix of options is a policy choice that requires complex trade-off decisions.”
GAO noted benefits and potential challenges with each of the policy options. For example, the GAO report said that requiring farmers to adopt climate-resilient practices to qualify for crop insurance subsidies “could be politically challenging to implement” and also could “impact producer participation” in the program.
The report acknowledged it would be challenging for USDA to collect the data needed to incorporate climate risks into insurance rates. The department also “may lack the necessary staff and technical capacity to implement this option effectively,” the report said.
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Conditioning premium subsidies on adoption of certain farming practices or expanding conservation compliance requirements for commodity programs to include climate resilience would be a non-starter with most farm groups. Top USDA officials, including Robert Bonnie, USDA’s undersecretary for farm production and conservation, have also stressed that adoption of such practices should remain voluntary.
Officials with USDA's Risk Management Agency have argued that climate risks already are reflected in crop insurance because of the way the impact of producers’ losses is incorporated into their future coverage.
GAO issued a separate two-page document Thursday that highlighted a previous recommendation to reduce crop insurance subsidies for high-earning farmers. GAO said that a means test on premium subsidies could “save millions of dollars in program costs while affecting less than 1 percent of program participants.”
That idea, too, has faced stiff opposition among farm groups and on Capitol Hill, and GAO noted in its climate-related recommendations that means-testing crop insurance would conflict with using the program to incentivize the adoption of climate-resilient practices.
Farm groups and the insurance industry argue that imposing a means test on premium subsidies could eventually result in rate increases for other producers.
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