By Dave Serfling

February 28, 2003
PRESTON, Minn.-It was the best of times and the worst of times. Our main characters are neighboring farmers in southeast Minnesota. Both operate 1,000 acres. For years, each had a 500-acre corn base with a 130-bushel government yield. In 1996 the farmers were told that would change: they could plant whatever they wanted except fruits or vegetables and their payments would not be affected-it was time to be "Free to Farm!" From 1998 to 2001, Farmer A developed a crop rotation of two years of corn and three years of hay on his 1,000 acres. Farmer B planted all his land to a corn-soybean rotation.

In 2002 each farm got identical direct commodity government payments of $14,365. That figure comes from the USDA formula of taking 85 percent of the 500 acres of base, multiplying that by 130 bushels, and multiplying that figure by the 26 cents per bushel payment rate (for more information on how I calculated the payments for Farmer A and Farmer B, click here). Now comes the 2002 Farm Bill and the farmers must decide whether they will change the acreage base that determines their payment. Farmer A keeps his 500-acre corn base because he only planted, on average, 400 acres of corn from 1998 to 2001. But that meant he had to keep his old 130-bushel per acre yield. No updated base, no updated yield. Since Farmer B planted his whole farm to corn and soybeans, he got to update his corn base and corn yield, as well as add a new soybean base. Farmer B now has a 500-acre corn base with a 170 bushel per acre updated yield. He also has a 500-acre soybean base with a 50 bushels per acre yield.

These two equal farms in 2002 are far from equal in payments in 2003, even though they could plant the same crops from here on out. If we assume the national average market prices for the year equal the government's loan rates-so all loan deficiency payments are left out of our comparison-then Farmer A receives $15,470 (500 x .85 x 130 x .28) in direct commodity payments. He also gets $18,785 in counter-cyclical payments for a total of $34,255. Farmer B receives the same direct payment of $15,470. But because he was able to update the farm's yield, and raises soybeans instead of forage, Farmer B gets nearly $23,000 more than Farmer A per year. That's a $138,000 bonus during the life of this six-year farm bill.

This is where our tale takes a troubling turn. The Land Stewardship Project asked University of Minnesota soil scientist Gyles Randall to make an informal comparison of Farmer A and Farmer B's erosion rates. Based on his experience with these kinds of rotations, Randall rated the erosion (a score of "one" being the lowest erosion rate) on each of the two farms for each of 10 years. Under the common chisel plow system, Farmer B's corn-soybean rotation produced a total erosion score over the 10 years of 70. Under the same tillage system, Farmer A's complex rotation scored a 34. In other words, Farmer A's use of forage made the farm half as erosive as Farm B's. But according to the government, Farmer A deserves less money-a lot less.

Is there a happy ending to this story? It depends on the fate of the Conservation Security Program (CSP). This program, which is a part of the 2002 Farm Bill, promises to begin to correct the inequalities that penalize conservation-minded producers like Farmer A. USDA is currently writing rules that will determine how CSP operates.

For CSP to be effective, core principles that were written into the law by Congress need to apply. CSP needs to: be implemented nationwide and retained as an entitlement; enforce strong limitations on the amount of tax money a producer gets; reward actual conservation results; make significant payments for excellent stewardship; and require farmers to reduce erosion to at least "T"-a level where soil isn't being lost faster than it can re-build itself-to qualify for minimal payments. We have until April 3 to get written comments to USDA officials (farmbillrules@usda.gov) and let them know that the CSP needs to stay true to the law that created it.

A program that rewards real conservation and benefits society is an end to this story that family farmers and taxpayers can both enjoy.

Dave Serfling farms near Preston, Minn., and is a member of the Land Stewardship Project Federal Farm Policy Committee.