An Inequality of Results

Note: This post is part of our League Symposium on inequality. You can read the introductory post for the Symposium here. To see a list of all posts in the Symposium so far, click here.

In the 1990 Farm Bill the Conservation Reserve Program (CRP) underwent a major change, shifting its focus away from soil protection and erosion control and towards the goal of habitat restoration for wildlife. The mechanics of the program are complex but the basic premise is that farmers are paid to stop planting crops on a portion of their land and to instead engage in specific practices designed to create habitat for wildlife. Under the program millions of acres of U.S. land, much of which lies in the west, has been leased under the CRP. This has been viewed by many as a victory for both wildlife and for outdoorsmen who have taken advantage of new hunting opportunities. For rural communities though, the longterm effects have been less positive.  One story from Washington state:

When farmers take a conservation payment rather than plant a crop, they don’t buy fuel and fertilizer, they don’t buy machinery and seed, and they don’t hire help for the harvest. In short…the payments stifle the local economies by suppressing high-production agriculture in an area that boasts some of the best wheat-growing conditions in the world.

What is happening in some rural communities is that they are moving away from a production-oriented economy towards a service economy. Instead of tractor dealerships and farm stores citizens work in hotels and restaurants that cater to traveling hunters. And as most people know, service jobs lead to large income gaps. This has been well-documented in large cities (NYC being the worst offender) by researchers like Joel Kotkin.

In LaCrosse, CRP is partly blamed for the loss of the town’s farm machinery dealership. Arrow Machinery closed its sales offices in LaCrosse and St. John and consolidated its presence in Colfax and Pomeroy.

“Used to be around here that the town would get some sales tax money when farmers would spend a few million dollars on new combines,” Burgess said. “We miss that.”

While the program helped many of them keep their land over the last few decades when commodity prices were lower, this dynamic has changed. Thanks to the rise of biofuels and other new products, prices for wheat, soybeans and corn are soaring and there is less motivation for farmers to continue to stay with the CRP. According to one source:

This year, contracts covering more than 6.5 million acres worth of CRP land will expire, the second-largest turnover in its 26-year history, according to USDA data.

In total, the amount of land in the CRP has fallen to the lowest since 1988, down 20 percent from a peak of 36.7 million acres in 2007, according to USDA data as of end-February.

While not all that land will be suitable for crops, economists say as much as half may be put back into farming for the first time in decades.

Interestingly enough, young farmers are seeing this as a once-in-a-generation chance to grab up land that hasn’t been farmed in years. The same program that saved the land from foreclosure is seen as one last obstacle to overcome before they can pursue their dreams of farming. With so many leases expiring this will be a dream realized for many of them.

What all of this points to is the reality that government programs, often created with the best of intentions, can lead to mixed results and at some point in the future they can actually cause real harm. The CRP saved much of the agricultural land of the west by encouraging more responsible farming practices in the 1950s and 1960s. In the 1980s and 1990s it kept farms afloat by replacing the loss of agricultural revenue. The program also restored millions of acres in wildlife habitat. The unintended effects have been an elimination of better-paying jobs and available land for aspiring farmers.

It’s hard to calculate if the CRP has been a net good or a ne bad. It sounds wishy-washy but the reality is that it has been both. The resolution is going to be left up to the interested parties. Is there a way to satisfy all of their goals? It is believed by some (myself included) that there is enough marginal land i.e. land unsuitable for crops but lying on their periphery, that the goals of good habitat can still be achieved. Farmers and hunters are natural partners in many respects and if they are willing to work together they can certainly find a solution that makes everyone happy.