Federal Payments May Total a Third of Farmer Income

Direct payments from the U.S. government to farmers and ranchers are trending higher this year.

Over the last decade, farm payments have averaged $11.5 billion per year; payments topped out at $13.8 billion in 2018, according to USDA data.

This year, USDA’s new trade relief program “will likely push 2019 direct payment above $21 billion, much higher than levels observed in recent memory,” said farm economist David Widmar of Agricultural Economic Insights.

That’s because the department plans to distribute another $14.5 billion in direct trade aid for 2019 production, in three separate tranches. (Widmar estimated that $9.7 billion would be paid out this year, with the rest coming in 2020, if needed.)

The money comes on top of the $11.5 billion in direct payments USDA was expecting to make this year, which includes the first round of trade aid, conservation payments and other programs.

Federal payments are on track to account for 27 percent of farmer income this year. While that’s well below record levels from the 1980s farm crisis, it’s still the highest in more than a decade.

Among programs supporting farmers is prevent plant, which the USDA’s Risk Management Agency said will top $1 billion in claims this year. As of July 1, the RMA reportedly had distributed $151 million in prevented planting claims, which is $39 million higher than the week before.

Sources: Politico, Agri-Pulse