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Direct Government Payments to Farmers Expected to Rise
USAgNet - 06/17/2016

Direct farm program payments are those paid directly from the government to farmers and include fixed payments, crop price- and revenue-based payments, and other payments such as conservation payments and disaster relief. Payments are forecast to rise by about 31 percent in 2016 to $13.9 billion.

The forecast reflects changes made in the 2014 Farm Act that eliminated several programs and added new price- and revenue-based support programs in an environment of declining crop prices.

The largest of these (in terms of payouts in 2015) were the Price Loss Coverage and Agricultural Risk Coverage. Although these programs commenced in 2014, payments corresponding to 2014 crop production (based on average prices received over the 2014-2015 crop marketing year) were made in the latter part of 2015.

PLC and ARC together are expected to account for over $9 billion in 2016-about 96 percent of all crop price- and revenue-based payments.

The majority of ARC payments were paid to farms with a history of corn production, followed by wheat and soybeans. PLC payments were primarily made to farms with a history of long-grain rice, peanuts, and canola production.

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