USDA Should Base Aid on Need  11/26 12:52

   Groups Press USDA to Tighten Standards for Expected Trade Aid Payments

   In a letter to USDA leaders, policy groups with diverse positions on federal 
spending are calling on the department to ensure any ad-hoc aid to farmers 
focuses on need and uses clear eligibility standards to reduce the risks of 
waste and fraud.

Chris Clayton
DTN Ag Policy Editor

   OMAHA (DTN) -- Policy groups with a diverse mix of views are urging USDA to 
focus on "commonsense financial accountability" as the department prepares an 
expected aid package for farmers.

   In a letter to Agriculture Secretary Brooke Rollins, the groups said they 
don't necessarily agree on the need for USDA to dip into emergency spending to 
help farmers with aid payments, but any trade bailout should be "needs-based" 
to reduce both waste and fraud. The groups noted in their letter, "at a 
minimum, if USDA issues payments, it should target funds based on need -- using 
clear, accurate eligibility and economic data -- and do so in a fully 
transparent manner."

   The letter sent this week comes from the R Street Institute, Farm Action 
Fund, Land Core, National Taxpayers Union, Soil & Climate Alliance, Taxpayers 
for Common Sense and Taxpayers Protection Alliance.

   The groups pointed out in their letter that USDA will spend $35.2 billion 
this year on supplemental and ad-hoc disaster assistance, "dwarfing all other 
direct programmatic expenditures to farmers." It should be noted those aid 
payments, while paid in 2025, focus on economic losses in 2024 and losses from 
natural disasters in 2023 and 2024.

   The groups also called for broad transparency by USDA in issuing payments to 
reduce the risk of "fraud, waste, or other misuse."

   Nan Swift, a resident fellow with the R Street Institute, noted farmers have 
faced some challenging conditions this year, but she also pointed to 
improvements to the safety nets and ad-hoc payments have already provided 
support to farmers.

   "Protectionist trade restrictions and retaliatory actions have created a 
frustrating business environment for farmers, from higher equipment and repair 
costs to loss of markets," Swift said. "Fortunately, there is already a robust 
federal farm safety net in place for such events. Layering on costly bailouts 
that favor those agribusinesses already best equipped to weather the highs and 
lows of modern commerce won't resolve the underlying problem: an urgent need 
for open and free markets."

   Rollins has said she expects USDA will announce an aid program for farmers 
within the next couple of weeks. The aid package is expected to cost roughly 
$12 billion, though no official details have been released.

   Groups such as the American Farm Bureau Federation (AFBF) have highlighted 
expected crop losses among major commodities as justification for a "bridge" 
payment that will carry producers until next October when higher Agricultural 
Risk Coverage/Price Loss Coverage (ARC/PLC) payments are expected.

   GROUPS WANT TIGHTER PAYMENT OVERSIGHT

   In their letter, the taxpayer organizations and others also called for USDA 
to ensure strong payment limits and income caps to ensure aid goes to farmers 
who need it the most. The 2018-19 Market Facilitation Program (MFP) paid out 
$23 billion, but limited total payments to $250,000 per producer with aid going 
to farmers whose adjusted gross income was $900,000 or less.

   The One Big Beautiful Bill Act increased the per-year payment cap for 
farmers from $125,000 to $155,000 and also eliminated income caps for farmers 
and entities such as LLCs with at least 75% of their income coming from 
agriculture.

   The groups also wrote USDA should ensure payments are restricted to working 
farmers by applying a stronger standard for the "actively engaged" rule. The 
groups said the current definition for actively engaged "falls short" and 
creates a large loophole for absentee landowners and passive investors to 
collect payments.

   The Government Accountability Office (GAO) reviewed MFP payments in 2022 and 
found problems with eligibility that led to $800 million in improper payments. 
MFP also did not have any requirement that farmers sign up for crop insurance 
or the Noninsured Disaster Assistance Program (NAP). The taxpayer groups stated 
USDA should condition trade aid on farmers enrolling in crop insurance or NAP 
as well.

   THE CASE FOR AID PAYMENTS

   AFBF, in its analysis earlier this week, highlighted that farmers growing 
just nine major crops nationally are projected to see combined losses of $34 
billion for the 2025 crop year. A lot of those financial losses stem not only 
from low commodity prices tied to trade disputes, but also high input prices 
farmers have incurred to produce a crop. AFBF pointed out cost of production 
for the 2025-26 crop were pegged at $179 billion, but crop revenue is pegged at 
$144 billion.

   Crops such as corn, which has strong export sales, still show average 
returns for farmers of more than $15 billion in losses. Soybeans show $6.7 
billion in negative returns and wheat comes in at $5.8 billion in losses, AFBF 
determined using USDA data.

   ARC/PLC BOOSTS COMING -- NEXT FALL

   Economists at the University of Illinois have been looking at projected 
payments under ARC/PLC that would be made in October 2026, after the marketing 
year for corn, soybeans and other crops have ended.

   The analysis on Farmdoc Daily projects ARC/PLC payments next year at $13.5 
billion.

   A provision in the One Big Beautiful Bill Act ensures farmers will receive 
the higher payment from either ARC or PLC for the 2025 crop regardless of which 
program they enrolled their crops in. That will add about $3.2 billion in 
payments to farmers, the Illinois economists project.

   Under the Farmdoc projections, corn farmers could receive $6 billion while 
wheat farmers would receive $2.9 billion. Soybean farmers would receive $1.17 
billion and seed cotton farmers would receive $1.4 billion. Long grain rice 
farmers would receive just over $1 billion.

   "Additional support is greatest for corn, soybeans, wheat, and grain sorghum 
-- commodities with base acre enrollment split relatively evenly between ARC-CO 
and PLC, or more heavily towards ARC-CO for 2025," the Illinois economists 
added.

   The Farmdoc analysis is based on current price projections and the 
economists cautioned, "much can still change over the course of the 2025 
marketing year."

   Letter led by R Street Institute:  
https://www.rstreet.org/outreach/coalition-trade-bailouts-should-be-needs-based-
and-avoid-unnecessary-waste-fraud/

   Farmdoc ARC/PLC analysis: 
https://farmdocdaily.illinois.edu/2025/11/additional-arc-plc-payments-for-2025-v
alue-of-receiving-the-maximum-program-payment.html

   Also see, "Rollins Says Farmer Aid Package Imminent and Chinese Soybean 
Purchases are Underway," 
https://www.dtnpf.com/agriculture/web/ag/blogs/ag-policy-blog/blog-post/2025/11/
24/rollins-says-farmer-aid-package

   Chris Clayton can be reached at Chris.Clayton@dtn.com

   Follow him on social platform X @ChrisClaytonDTN




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