A glimmer of hope shot through bleak, in-the-red farm country late last year as Congress included $10 billion of economic aid for farmers in an end-of-year resolution.
Alabama Farmers Federation President Jimmy Parnell said the relief package was a critical first step to help farmers stay in business until a new, improved farm bill is passed. The American Relief Act extended the 2018 farm bill through September.
“Farmers are facing one of the worst economic downturns in four decades,” Parnell said. “Many issues impacting their bottom line are out of their control — including poor trade policies, depressed commodity markets and sky-high inflation. High fuel prices are directly due to President Biden’s war on energy, while the war in Ukraine has led to high fertilizer prices.
“I am convinced passing this package is one of the most impactful actions the 118th Congress took. While $10 billion won’t make farmers whole, it will allow many to plant another crop,” he added.
Payment Rates
Commodities are eligible for payments if gross revenue for the 2024 crop is below the cost of production. The promised influx of cash stanched the bleeding and helped farmers secure operational loans heading into 2025. Alabama farmers should receive $74 million of the economic assistance.
Using U.S. Department of Agriculture (USDA) data, estimated payment rates per acre are:
- Corn – $43.80
- Cotton – $84.70
- Oats – $80.14
- Peanuts – $76.30
- Sorghum – $41.85
- Soybeans – $30.61
- Wheat – $31.80
Prevent-plant acres are reduced by 50% for the calculation, and payment limits are separate from annual limits under other programs. The limit is $250,000 if not less than 75% of adjusted gross income (AGI) is derived from farming, while the limit is $125,000 if less than 75% of AGI comes from farming.
Federation National Affairs Director Mitt Walker said payments should be distributed by the end of March.
An Uncertain Future
The relief package comes at a pivotal time in American agriculture. USDA data indicates row crop farmers likely lost more than $32 billion in 2024 alone, considering high production costs; prices from the World Agricultural Supply and Demand Estimate; and the 10-year average yield per acre.
The future remains uncertain as blows hit battered bank accounts. USDA reports farm income dropped by 25% in two years, while farm sector debt is forecast to climb 4.5% to a record $542.5 billion. USDA data shows another record trade deficit.
Walker said relentless punches could shutter more farms. The U.S. lost 140,000-plus farms between 2017 and 2022, per the Census of Agriculture. More than 3,000 were in Alabama.
Alabama Leads the Way
The fight for farm relief has its roots in Alabama, Parnell said. He praised Walker’s leadership in rallying farm groups and Congress around the need for immediate economic assistance.
“I have said many times that this effort started in Montgomery with Mitt Walker,” Parnell said. “Mitt began working on the issue months ago, when much of the country was focused solely on the farm bill. We were hearing from our members about the desperate financial situation and knew they couldn’t wait 18 months for a new farm bill to go into effect. Mitt worked tirelessly to gather information, build a coalition and educate members of Congress.”
House Agriculture Committee Chairman G.T. Thompson, R-Pa., and Senate Agriculture Committee Ranking Member John Boozman, R-Ark., played key roles in bringing the relief package to the floor. The American Relief Act also funds the government through March 14 and includes $21 billion for farmers recovering from natural disasters.
Parnell and Walker specifically thanked Alabama’s nine-member Congressional delegation, which was unified in support of the bill.
“I want to thank our legislative delegation for their willingness to get in on this and help,” Parnell said. “They’ve been as engaged in this effort as anything I’ve seen.”
Alabama farmers will advocate for the next stage of assistance — a new farm bill — this spring during the Federation’s Washington Legislative Conference.
Courtesy of ALFA.
