Agricultural Economics Department


Date of this Version



Cornhusker Economics (August 14, 2013)


Published by University of Nebraska–Lincoln Extension, Institute of Agriculture & Natural Resources, Department of Agricultural Economics. Copyright © [2013] Board of Regents, University of Nebraska.


Current and past farming practices have led to significant environmental degradation in the form of soil erosion (sediments), as well as fertilizer and chemical related water pollution. The United States Department of Agriculture (USDA) has long tried to implement policies to temper such negative effects on the environment. The 2008 Farm Bill which currently guides agricultural and related environmental/conservation policy is being revised on this front. The United States Senate and the House of Representatives are each currently proposing a version of the 2013 Farm Bill to change the existing system, making it more efficient in achieving environmental (and other food related) goals, while also seeking significant spending cuts. Both versions remove direct payments to farmers. A key difference between the two proposals is in the changes to crop insurance subsidies as related to conservation compliance, which is the focus of this study. While both proposals continue these subsidies, the version passed by the Senate makes this subsidy conditional on conservation compliance, whereas the version passed by the House provides this subsidy without such compliance.