U.S. farmers will receive about $31 billion in economic and disaster relief payments in the coming months.
About $21 billion is for disaster relief, which will mostly go toward recovering economic losses from natural disasters that occurred in 2023 and 2024. The funds will be distributed by the U.S. Department of Agriculture.
And $10 billion in economic relief payments will go mainly to farmers who grow corn, soy and wheat. The one-time payments will be calculated using a per-acre formula, and must be distributed before the end of March.
Texas, Illinois and Iowa are among the states that could receive the most funding, according to an estimate from the University of Missouri.
Farmers can use the money to catch up or prepare for the next season, said Jennifer Ifft, a professor and agricultural policy specialist with the Kansas State University Extension.
“Maybe you can repay some of [an] operating loan so you don’t have to take on undesirable levels of debt.” she said. “Maybe you can prepay some of your expenses for next year, because the sooner you pay, usually you can get a better rate… Maybe you just want to save some cash. Maybe you just want to save it.”
Lawmakers passed the funding in December alongside another extension of the 2018 Farm Bill. The massive legislation funds programs like crop insurance and food benefits, including the Supplemental Nutrition Assistance Program.
The relief payments are meant to close the gap between the support farmers receive through the farm bill and the current economic landscape. Prices for inputs like seed, fertilizer and pesticides have remained high, while crop prices have declined since record highs in 2022.
The relief funding is considered ad hoc assistance, which are one-time payments authorized by the government. Ad hoc payments have been used multiple times since 2018 to supplement aid from the farm bill, Ifft said.
“So, this $31 billion is not unprecedented,” Ifft said. “We’ve been seeing this increasing reliance on programs that come from outside of the farm bill since 2018.”
The farm bill is a highly partisan piece of legislation that lawmakers have been trying — unsuccessfully — to update since the 2018 bill first expired in 2023.
Patrick Westhoff, the director of the Food and Agricultural Policy Research Institute at the University of Missouri, said that it’s hard to pass the farm bill.
New dollars have to come from somewhere else in the federal budget or lawmakers have to increase the deficit.
In the case of ad hoc payments, the administration can unlock emergency funding that doesn’t have to be offset or impact the deficit.
The government must distribute the economic relief funding by March. There is no timeline set for the disaster relief payments.
