Southern farmers may face a $1.4 billion loss in farm subsidies over ten years if Congress closely matches subsidy payments with crops grown, according to a Senate Agriculture Committee analysis by Republicans.
Base acres are lands eligible for crop subsidies, with farmer payments partially based on their number. The USDA initially assigned base acres to growers based on their historical crop production between 1981 and 1985, with adjustments made in 2002, 2008, and 2014.
The National Corn Growers Association wants a mandatory update of base acres in the 2023 farm bill. Updates in the past were optional and mostly done when growers believed they would benefit from them.
Regions that grow corn, soybeans, and wheat, like the Midwest and Plains, would generally profit from a mandatory update, says the Republican analysis. This update would change base acres to reflect crop patterns from 2018 to 2022.
A base acre update, whether mandatory or voluntary, would affect each farm differently. Some farmers could gain, while others lose, based on their mix of crops. How this update impacts the government budget would depend on various factors.
In recent years, more land was used for crop cultivation than enrolled in the base acre program, with soybean plantings being 50% more than soy base acres. However, more base acres were enrolled for subsidies for crops like corn, peanuts, rice, wheat, sorghum, and barley than actually planted.
A mandatory base acre update could reduce farm program payments by nearly $2 billion in the next decade, creating winners and losers among neighbors, crops, counties, and states.
In total, 34 states could lose $3 billion, while 16 states might gain $1.1 billion. That's a nationwide reduction of around $2 billion over a decade. The 11 southern states would lose a net of $1.4 billion.
Some states could face large decreases, like California ($457 million), Louisiana ($329 million), Arkansas ($314 million), Mississippi ($271 million), and Illinois ($181 million). Other states, like Kansas ($286 million), North Dakota ($258 million), South Dakota ($133 million), Missouri ($131 million), and Pennsylvania ($74 million), could see increases.
The USDA calculates subsidy payments based on a farm's base acres and "payment yields" for crops linked to those acres. Farmers who started growing covered commodities after the last grant may be ineligible for certain crop subsidies.
Photo Credit: istock-oticki
Categories: South Dakota, Business