In a reversal, the USDA said on Wednesday that family-run farms are not subject to a rule that tightens eligibility standards for crop subsidies — the opposite of what it announced three months ago. A small-farm advocate criticized the "correction," which applies to the bulk of U.S. farms, as a violation of the rule-making process and encouraged the incoming Biden administration to void it.
In just three weeks, the USDA sent $4.52 billion to farmers and ranchers through its new coronavirus relief program, data released on Tuesday show. More than $4 of every $10 disbursed by the so-called CFAP2 went to corn and soybean growers, concentrated in the Midwest.
The average USDA coronavirus relief payment to farmers is less than $16,000 but the biggest operators are getting payments that are 22-times larger, said an environmental group on Tuesday in questioning the fairness of the $10 billion program. Meanwhile, lawmakers agreed to give more funding to the USDA so it can keep farm supports flowing.
With its new offer of $14 billion in coronavirus relief, the Trump administration could spend $50 billion — quadruple the cost of the auto industry bailout — in less than three years to buffer the impact of trade war and pandemic on agriculture. Farm groups welcomed the second round of coronavirus assistance while critics said it was "old-fashioned vote-buying" ahead of the Nov. 3 presidential election.
Although the USDA adopted a stricter rule on who qualifies for crop subsidies, farm-program reformers said on Monday there was more work to do. The new rule, which applies to people who say they deserve a payment because they help manage a farm, should be applied across the board to all USDA programs and it needs to have teeth, they said.
Loopholes remain, but the USDA is tightening its crop subsidy rules by limiting who can collect a payment for managing a farm, historically one of its most porous definitions. The new regulation, to be published on Monday, requires people to perform at least 500 hours of management or at least 25 percent of the management work required annually to merit a subsidy check — "a very major advancement," according to a small-farm advocate.
The 54 leading countries of the world spend roughly $700 billion a year on farm subsidies, equal to 12 percent of gross farm revenues, said the OECD on Tuesday. The average rate of producer support in OECD countries – the industrialized world – is more than double the rate in emerging and developing nations, mostly in Asia, Africa and South America, despite some "convergence" in the past two decades. (No paywall)
U.S. farm income, under pressure this year from the trade war and coronavirus pandemic, could fall off a cliff next year when record-setting federal payments are due to end, according to early assessments. A plunge in income could be avoided by cost-cutting on the farm, a recovery in commodity demand, or a new multibillion-dollar round of federal aid, but they are not assured, say analysts.
This week's White House budget proposal to cut crop insurance by 31 percent and to tighten eligibility rules for farm subsidies would save less in 10 years than the administration spent to mitigate the impact of the Sino-U.S. trade war on 2018 and 2019 farm production, said an economist.