Some economists have estimated that new subsidies from the U.S. government’s five-year farm bill could be as high as $10 billion. That would be more than 10 times the U.S. Department of Agriculture’s (USDA) working estimate and more than double the forecast by the Congressional Budget Office (CBO).
If farmers’ revenues fail to meet benchmarks tied to long-term price and production averages, they could receive payouts. The USDA and CBO made their estimates before crop prices fell on record harvest expectations.
The farm bill’s new programs were meant to cost taxpayers less by replacing a nearly two-decade-old scheme of direct cash payments to farmers, which were about $5 billion per year and were made regardless of need.
Due to ample supplies, corn prices have fallen well below the long-term average price used as a benchmark for one of the farm bill’s programs. This year’s bumper harvest may not be large enough to compensate for the price falls, and revenues for some farmers could be low enough to trigger payments.
Beginning November 17, farmers were able to start signing up for the programs. Most participants will be the farm families who own and operate about 98 percent of all U.S. farms.
Farmers Stand To Gain Up To $10 Billion In Payments Triggered By New Farm Bill