Policy Groups Push for Needs-Based Aid

OMAHA (DTN) -- Policy groups with a diverse mix of views are urging USDA to focus on "commonsense financial accountability" as the department prepares an expected aid package for farmers.

In a letter to Agriculture Secretary Brooke Rollins, the groups said they don't necessarily agree on the need for USDA to dip into emergency spending to help farmers with aid payments, but any trade bailout should be "needs-based" to reduce both waste and fraud. The groups noted in their letter, "at a minimum, if USDA issues payments, it should target funds based on need -- using clear, accurate eligibility and economic data -- and do so in a fully transparent manner."

The letter sent this week comes from the R Street Institute, Farm Action Fund, Land Core, National Taxpayers Union, Soil & Climate Alliance, Taxpayers for Common Sense and Taxpayers Protection Alliance.

The groups pointed out in their letter that USDA will spend $35.2 billion this year on supplemental and ad-hoc disaster assistance, "dwarfing all other direct programmatic expenditures to farmers." It should be noted those aid payments, while paid in 2025, focus on economic losses in 2024 and losses from natural disasters in 2023 and 2024.

The groups also called for broad transparency by USDA in issuing payments to reduce the risk of "fraud, waste, or other misuse."

Nan Swift, a resident fellow with the R Street Institute, noted farmers have faced some challenging conditions this year, but she also pointed to improvements to the safety nets and ad-hoc payments have already provided support to farmers.

"Protectionist trade restrictions and retaliatory actions have created a frustrating business environment for farmers, from higher equipment and repair costs to loss of markets," Swift said. "Fortunately, there is already a robust federal farm safety net in place for such events. Layering on costly bailouts that favor those agribusinesses already best equipped to weather the highs and lows of modern commerce won't resolve the underlying problem: an urgent need for open and free markets."

Rollins has said she expects USDA will announce an aid program for farmers within the next couple of weeks. The aid package is expected to cost roughly $12 billion, though no official details have been released.

Groups such as the American Farm Bureau Federation (AFBF) have highlighted expected crop losses among major commodities as justification for a "bridge" payment that will carry producers until next October when higher Agricultural Risk Coverage/Price Loss Coverage (ARC/PLC) payments are expected.

GROUPS WANT TIGHTER PAYMENT OVERSIGHT

In their letter, the taxpayer organizations and others also called for USDA to ensure strong payment limits and income caps to ensure aid goes to farmers who need it the most. The 2018-19 Market Facilitation Program (MFP) paid out $23 billion, but limited total payments to $250,000 per producer with aid going to farmers whose adjusted gross income was $900,000 or less.

The One Big Beautiful Bill Act increased the per-year payment cap for farmers from $125,000 to $155,000 and also eliminated income caps for farmers and entities such as LLCs with at least 75% of their income coming from agriculture.

The groups also wrote USDA should ensure payments are restricted to working farmers by applying a stronger standard for the "actively engaged" rule. The groups said the current definition for actively engaged "falls short" and creates a large loophole for absentee landowners and passive investors to collect payments.

The Government Accountability Office (GAO) reviewed MFP payments in 2022 and found problems with eligibility that led to $800 million in improper payments. MFP also did not have any requirement that farmers sign up for crop insurance or the Noninsured Disaster Assistance Program (NAP). The taxpayer groups stated USDA should condition trade aid on farmers enrolling in crop insurance or NAP as well.

THE CASE FOR AID PAYMENTS

AFBF, in its analysis earlier this week, highlighted that farmers growing just nine major crops nationally are projected to see combined losses of $34 billion for the 2025 crop year. A lot of those financial losses stem not only from low commodity prices tied to trade disputes, but also high input prices farmers have incurred to produce a crop. AFBF pointed out cost of production for the 2025-26 crop were pegged at $179 billion, but crop revenue is pegged at $144 billion.

Crops such as corn, which has strong export sales, still show average returns for farmers of more than $15 billion in losses. Soybeans show $6.7 billion in negative returns and wheat comes in at $5.8 billion in losses, AFBF determined using USDA data.

ARC/PLC BOOSTS COMING -- NEXT FALL

Economists at the University of Illinois have been looking at projected payments under ARC/PLC that would be made in October 2026, after the marketing year for corn, soybeans and other crops have ended.

The analysis on Farmdoc Daily projects ARC/PLC payments next year at $13.5 billion.

A provision in the One Big Beautiful Bill Act ensures farmers will receive the higher payment from either ARC or PLC for the 2025 crop regardless of which program they enrolled their crops in. That will add about $3.2 billion in payments to farmers, the Illinois economists project.

Under the Farmdoc projections, corn farmers could receive $6 billion while wheat farmers would receive $2.9 billion. Soybean farmers would receive $1.17 billion and seed cotton farmers would receive $1.4 billion. Long grain rice farmers would receive just over $1 billion.

"Additional support is greatest for corn, soybeans, wheat, and grain sorghum -- commodities with base acre enrollment split relatively evenly between ARC-CO and PLC, or more heavily towards ARC-CO for 2025," the Illinois economists added.

The Farmdoc analysis is based on current price projections and the economists cautioned, "much can still change over the course of the 2025 marketing year."

Letter led by R Street Institute: https://www.rstreet.org/…

Farmdoc ARC/PLC analysis: https://farmdocdaily.illinois.edu/…

Also see, "Rollins Says Farmer Aid Package Imminent and Chinese Soybean Purchases are Underway," https://www.dtnpf.com/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on social platform X @ChrisClaytonDTN

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