Congress avoided an end of the year government shutdown when it passed a short-term funding bill on December 21. The bill was quickly signed into law by President Biden and funds the federal government through March 14, 2025.
A one-year extension of the Farm Bill and $31billion in disaster and economic assistance for farmers and ranchers was included in the legislation.
This is the second year-long extension of the 2018 Farm Bill, which was originally set to expire on September 30, 2023. Many in Congress recognized the need to address changing agricultural economic conditions, but no consensus has been reached on how to pay for improvements to the farm safety net in the next Farm Bill.
Disaster and Economic Assistance
Instead, Congress has provided $10 billion in ad-hoc economic assistance and an additional $21 billion in disaster aid for farmers who suffered losses in both 2023 and/or 2024. Losses from droughts, wildfires, hurricanes, floods, derechos, excessive heat, tornados, winter storms, freeze events, and excessive moisture are eligible.
The economic assistance in the bill provides farmers one-time per acre payments for every acre of crop planted in 2024 for 21 eligible commodities. It would also provide a 50% payment for prevent plant acres. The payment rate formula was laid out in the bill. The payment rates are not final and are subject to USDA discretion. They are likely to be marginally different than presented here. The following estimates were provided by the House and Senate Agriculture Committees:
Source: US House Committee on Agriculture
The payments are subject to $125,000 payment limits that could increase to $250,000 for producers who receive 75% or more of their gross income from farming. Additionally, the bill requires USDA to issue checks within 90 days after the bill becomes law. However, with the change in administration and new leadership not yet in place at USDA, it may be a challenge to meet this deadline.
Year-Round E15 Left Out of Deal
One key provision removed from the larger bill was the proposal to allow year-round E15 ethanol blends. Biofuels advocates believed they had secured a victory when the language was included in the original draft, but for reasons that remain unclear, the provision was cut from the bill prior to passage. Increasing the ethanol blend by just one percentage point nationwide would add about 1.4 billion gallons of ethanol. At present, E15 is approved year-round only in eight Midwestern states that successfully petitioned the EPA for a waiver.
