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Posted: Thursday, July 28, 2011 9:00 AM




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Farm subsidy sources

Besides the direct and countercyclical payments available to certain commodity farmers, the USDA offers producers a host of cash and loan programs. They include:

* The Conservation Reserve Program: CRP provides farmers and ranchers annual rent payments for idling environmentally sensitive land over the course of a 10-year contract.

* Marketing Assistance Loans: The USDA provides interim financing for producers of wheat, rice, feed grains, soybeans, oilseeds, pulse crops, peanuts, honey, wool and mohair who hold their crop while waiting for more favorable markets. The crop is pledged as collateral.

* Loan Deficiency Payments: Farmers eligible for marketing loans can instead elect to take loan deficiency payments. LDPs are direct payments equivalent to the gain.

* Disaster payments: Direct payments are made to farmers with or without crop insurance when adverse weather prevents planting or causes abnormally low yields.

* Federal Crop Insurance: This program provides loss protection on more than 100 crops through private insurance companies. Premiums and administrative expenses are subsidized by the USDA.

Source: USDA and Congressional Research Service

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