Congress included economic aid for farmers in the continuing resolution (CR), which keeps the government funded through March 14, 2025. The “Economic Loss Assistance Program” earmarks $10 billion in direct payments for farmers.
While USDA will make the final calculations, Farm CPA Paul Neiffer estimates per acre producer payments will be the following:
- Corn: $43.80
- Soybeans: $30.61
- Wheat: $31.80
- Cotton: $84.70
- Rice: $71.37
Payment formula: Payments are calculated based on the difference between expected gross returns and production costs, with a 26% adjustment factor to stay within budget. For certain crops like barley, rice, and peanuts, a minimum payout ensures better support.
The House Ag Committee also released a chart outlining the estimated payment rates on a per acre basis for all crops, along with a fact sheet regarding details of the program.
When and How Farmers Will Receive Their Payments
Economic aid will come 90 days after passage, which was Saturday, Dec. 21, 2024.
“USDA will come out with their program and since they have all of the data, the farmer will likely not have to do anything other than sign up. I would expect the payment to go out in February or perhaps early March, since they have to issue those payments within 90 days,” Neiffer said.
Payment Limits and Eligibility
According to Farm Journal Washington Correspondent Jim Wiesemeyer:
- Payments cover eligible commodities, excluding wool, mohair, and honey.
- Limits: $125,000 for non-farming majority AGI and $250,000 for farming-majority AGI. The “average” gross income method aims to improve fairness compared to previous systems.
Neiffer says whether a farm qualifies for the increased payment limit, that will be based on the numbers reported on your tax return for 2020, 2021 and 2022. You ignore 2023.
There is a payment limit of $125,000, which is down from the $175,000 originally proposed in the FARM Act. It’s also key to note, if 75% of your total gross income comes from farming, Neiffer says you qualify for the double payment limit. Farming also includes wages and dividends from a farm corporation.
To clear up some misconceptions, he is quick to point out there is no double payment, but there is a double payment limit.
“Your payment calculation is always the same,” Neiffer explains. “If your calculated payment is over $125,000, then the doubling of the payment limit is important.”
$21 Billion in Disaster Aid for Ag
Congress also passed $21 billion in agriculture disaster aid. That’s in addition to the $10 billion of economic aid. $2 billion of the $21 billion is for livestock.
From all the information available, Neiffer thinks it will be similar to the 2020/21 Emergency Relief Program (ERP). He says when it comes to Phase I, it will be strictly based on crop insurance and they will get a bump up on coverage. For example, they will redo it at the 95% level if you elected 80% or higher and make a payment based on that.
He says Phase 2 will be based on tax returns which farmers have for 2023 but not necessarily 2024; however, USDA will need to release the final details on exactly how the payments will be dispersed.
Additional Details on Payments and Disaster Aid
Neiffer conducted a webinar to help hash out all the details included in the CR and what farmers can expect.
You can watch that webinar here.
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