By Jess Savage
The one-time payments could offer short-term support as many farmers grapple with less income and extreme weather.
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.
It was the second time legislators extended the five-year bill, which was passed before the COVID-19 pandemic, a major trade war and inflation impacted the U.S. and global economies.
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.
Fifth-generation Kansas farmer Matt Splitter has been feeling this squeeze, on top of drought in the state. In some areas of his fields, he’s only been able to harvest 15% or less of the crops he was expecting. Crop insurance just doesn’t go far enough in these situations, he said.
“I wouldn't say that it's dire for us on our operation that these payments will get us through to the next year,” Splitter said “But what it will help us really put a band aid, or put a plug, in the gap of just not having a whole crop with costs and expenses remaining high – again, something that we can't control.”
Still, the economic relief might not be enough to help farmers break even, according to an agriculture report from the University of Illinois.
Factoring in the financial support from the payments, farmers growing corn and soybeans in central Illinois could still lose between $23 and $118 per acre. The economists are projecting that some farmers in the region who grow an even split of the crops would lose $71 per acre, which is historically low.
Short-term support
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 – both of which are politically unpopular.
In the case of ad hoc payments, the administration can unlock emergency funding that doesn’t have to be offset or impact the deficit.
Many agriculture groups have emphasized that farmers need a new farm bill. Ryan Whitehouse, the director of national legislation at the Illinois Farm Bureau, said it’s a top legislative priority for the group, which represents 400,000 farmers in the state.
“Farmers are working in a 2025 economy with policies that were created in 2018... So it will be a full court press to get a farm bill done sooner rather than later,” Whitehouse said.
This growing season
The relief payments will likely also benefit banks and lenders, the University of Missouri’s Westhoff said.
Most farmers take out a loan every season to purchase their inputs. Because many are making less money than recent years, lenders could worry that farmers are less likely to pay back their loans, Westhoff said. These payments can offer a bit of relief, he said.
“We've heard from lots of lenders that this was indeed a spring [season] they were very concerned about, and they were hoping to see something to change the dynamic,” Westhoff said.
Back in central Kansas, Matt Splitter empathizes that these payments could be a lifeline for other young farmers who might have been devastated by drought or recent hurricanes.
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