How high could farm subsidies go? $40 billion this year.

If farm subsidies were a crop, this year’s payments would fit the hoary rural adage, “big crops get bigger.” USDA supports, already forecast to set a record, could exceed $40 billion this year, thanks to the second round of coronavirus relief now available to farmers and ranchers.

Sign-ups for the so-called CFAP2 payments opened on Sept. 21. A USDA spokesperson was not immediately available on Monday to say how much money has been disbursed during the first two weeks of applications. Up to $14 billion is earmarked for the new iteration of the Coronavirus Food Assistance Program.

“Direct government payments to farmers are likely to exceed $40 billion in 2020,” said Pat Westhoff, director of the FAPRI think tank at the University of Missouri. “These record payments support farm income in a year when cash receipts from sales of agricultural commodities have been reduced by the COVID pandemic and other factors.”

Besides money from CFAP2, farmers will collect more than $10 billion from the original CFAP, along with a final dose of trade-war payments, traditional crop subsidies that run from $10 to 15 billion a year, and land stewardship payments that cost a couple of billions of dollars annually.

The financial flood is forecast to buoy net farm income — a USDA gauge of profitability — to $102.7 billion this year, the highest total since the end of the commodity boom in 2013. Subsidies are expected to equal 36% of farm income, the most since 41% in 2001, another era of stress. Most commodity prices tumbled with the outbreak of the pandemic, and the accompanying economic recession has throttled sales.

Rob Johansson, USDA chief economist, says CFAP2 payments will run into 2021, when farm spending would contract with the expiration of most of the stopgap farm programs created since 2018 by the White House. At an agribusiness conference last week, Johansson said federal aid to agriculture could approach $40 billion this year. His estimate included $5.8 billion from the Payroll Protection Program. Westhoff used only USDA programs in his estimate and included likely receipts from CFAP2. Johansson said CFAP and CFAP2 would total $18 billion this year.

The USDA ran a payment dashboard, updated each Monday, on its CFAP website. The USDA launched its CFAP2 website without a payment counter.

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
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