U.S. Congress has passed new Economic Loss Assistance Program providing $10 billion in direct payments to farmers

Congress recently passed a new Economic Loss Assistance Program as part of the continuing resolution (CR) to fund the government through March 14, 2025. This program allocates $10 billion in direct payments to farmers to help mitigate economic losses. The estimated payment rates per acre are set at $43.80 for corn, $30.61 for soybeans, $31.80 for wheat, $84.70 for cotton, and $69.66 for rice, according to Farm CPA Paul Neiffer.

Neiffer explains that the USDA will finalize the payment calculations, which are based on the difference between expected gross returns and production costs, adjusted by 26% to remain within budget constraints. A minimum payout for certain crops such as barley and peanuts is also included to ensure adequate support.

A crucial aspect of the program is the timing of payments. Farmers can expect to receive their payments approximately 90 days following the legislation’s enactment, which would be around February or early March 2025. Neiffer emphasized that the USDA will administer the program using existing data, which should simplify the process for farmers, requiring only registration to receive payments.

The program also specifies payment limits, with a cap of $125,000 for non-farming majority Adjusted Gross Income (AGI) and $250,000 for farming-majority AGI. These limits are designed to promote fairness by using the “average” gross income method. Notably, if 75% of an individual’s gross income derives from farming, they qualify for a doubled payment limit.

Additionally, the resolution includes $21 billion for agricultural disaster aid, supplementing the direct payments. $2 billion of this disaster aid is specifically designated for livestock. Neiffer compares the implementation of this aid to previous programs, suggesting that the initial phase will likely be based on crop insurance, with subsequent adjustments based on tax returns from relevant years.