farm subsidies

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.

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.

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.

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. <strong> (No paywall) </strong>

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.

Farmers are eligible for up to $500,000 apiece for the hurricanes, wildfires, floods and other disasters they faced in 2018 and this year, including Hurricane Dorian last weekend, said the USDA on Monday, with $3 billion in aid available. As it did in July for Trump tariff payments, the USDA set the maximum disaster payment at double the Congressional limit for farm subsidies.

Farmers and ranchers will receive a projected $10.7 billion in Trump tariff payments this year, the major reason that direct federal payments will amount to 22 percent of net farm income, say USDA economists. The trade war payments would be twice as large as last year's $5.1 billion, when the administration created the stop-gap Market Facilitation Program to mitigate the impact of the Sino-U.S. trade war on the agricultural sector.

The Trump administration has spent notably less than commonly described on its package to mitigate the impact of the trade war on 2018 agricultural production. This year’s version may come closer to the $16 billion maximum trumpeted by the president because of more accommodating payment rules.

For the second time in 14 months, President Trump announced a multibillion-dollar government intervention to prop up the farm sector, a prominent casualty of the Sino-U.S. trade war. The first bailout, announced in April 2018, has sent around $8.3 billion in cash to growers so far; the new rescue will buy "agricultural products from our Great Farmers, in larger amounts than China ever did, and ship it to poor & starving countries in the form of humanitarian assistance," the president said on social media.

When Congress passes disaster bills, the government commonly compensates growers for loss of crops and livestock with the proviso they buy crop insurance in the future so they are protected against catastrophic damage. Companion bills filed by Democrats in the House and Senate would go a step farther by giving farmers the money to pay for the policies — a "terrible" expansion of the federally subsidized program, says a small-farm advocate.

Congress is expected to send President Trump a farm bill this week that makes nieces, nephews and first cousins of farmers eligible for crop subsidies, a setback in the decades-old drive to control farm spending. Farm groups learned of the decision ahead of the formal release of the final version of the bill. House and Senate negotiators signed the so-called conference report on Monday, the first step toward a final vote on the $87 billion-a-year bill.