Growers in the U.S. South could lose $1.4 billion in farm subsidies over the next decade if Congress decides to align payments more closely with the crops they produce, said an analysis by Republicans on the Senate Agriculture Committee. “A mandatory base acre update would create winners and losers … and most certainly complicate efforts to pass a new farm bill,” said the analysis.
Base acres, an arcane topic outside of agriculture, are lands eligible for crop subsidies. Farm payments depend in part on how many base acres a farmer has. The USDA originally allocated base acres to growers in proportion to their historical production of farm program crops from 1981 to 1985, with adjustments in 2002, 2008, and 2014.
The National Corn Growers Association supports a mandatory update of base acres as part of the 2023 farm bill. Past updates have been voluntary, and generally pursued when growers expected to benefit from them.
“One of our principles for the 2023 farm bill is to strengthen the producer safety net,” said the NCGA. “Corn growers voted to adopt a new policy supporting a nationwide mandatory base acre update, which would modernize base acres and address the accessibility of these farm [support] programs.”
The Midwest and Plains, the predominant regions for corn, soybeans, and wheat, generally would benefit from a mandatory update, said the Republican analysis, which adjusted long-standing base acres to reflect crop patterns from 2018 to 2022.
Farm bill disputes are often regional rather than driven by party affiliation, with SNAP being the exception.
Whether voluntary or mandatory, an update of base acres would have farm-by-farm effects, said Pat Westhoff, director of the FAPRI think tank. “Even county-level data may mask differences across farms,” with some producers who “gain base” and others who lose it depending on their mix of crops, he said. The budgetary impact for the government would depend how thorough the update was; if exceptions were allowed; the time period used to assign base; and how double-crop, prevented-planting, and silage acreage was treated.
In recent years, more land was planted to crops that are part of the farm program than was enrolled in the base acre program, said the Congressional Research Service in May. For example, there were nearly 30 million acres — 50 percent — more of soybean plantings than there were of soy base acres. Conversely, there were more corn, peanuts, rice, wheat, sorghum, and barley base acres enrolled for farm subsidies than were actually planted. The CRS said the disparity reflected “farmers’ preferences for maintaining base acre allocations to crops grown historically on the land and changes in planting patterns after 2018 in response to market conditions.”
Over the past couple of decades, the corn and soybean belt has expanded northward, while wheat plantings have plunged and cotton plantings have declined.
“For the 2024 to 2033 fiscal years, the economic costs associated with a proposed mandatory base acre update result in a projected decline in farm program payments of nearly $2 billion. This is largely due to commodity-by-commodity base acre changes,” said the Republican analysis. “A mandatory base acre update would create winners and losers among neighbors, crops, counties, and states and most certainly would complicate efforts to successfully pass a new farm bill.”
The analysis said that 34 states would lose $3 billion while 16 states would gain $1.1 billion, for a nationwide reduction of some $2 billion over a decade. The Congressional Budget Office estimates that commodity supports would total $84 billion over that period if there were no changes in farm law.
The 11 southern states would lose a net of $1.4 billion, according to a state-by-state list of the impact.
According to the Republican analysis, the states with the largest decreases would be California, at $457 million, followed by Louisiana ($329 million), Arkansas ($314 million), Mississippi ($271 million), and Illinois ($181 million). The states with the largest increases would be Kansas, at $286 million, followed by North Dakota ($258 million), South Dakota ($133 million), Missouri ($131 million), and Pennsylvania ($74 million).
The USDA calculates subsidy payments based on a farm’s base acres and the so-called payment yields assigned to the crops associated with the base acres. “Farmers who began producing covered commodities after the last time new base acres were granted may be ineligible for PLC or ARC [crop subsidy programs] due to lack of base acres,” said the CRS report.