(Adds comments from USDA, wheat farmers' group)
By Tom Polansek
CHICAGO Oct 4 The U.S. Department of
Agriculture will pay more than $7 billion of taxpayers' money to
farmers this fall to keep them afloat in the face of low crop
prices, agency officials said on Tuesday.
The USDA released the total on the same day that payments
started going out to more than 1.5 million growers of corn,
soybeans and other crops, who had enrolled in U.S. safety-net
programs to protect themselves from market downturns last year.
Prices for the crops have stayed low in 2016 as massive
harvests around the world have increased inventories and
intensified competition for exports.
U.S. farmers recently started bringing in their latest corn
and soybean harvests. Both of which are expected to be
record-large due to favorable weather.
"The program payments being announced today will provide a
needed cushion for farmers during these tough economic
conditions," said Gordon Stoner, president of the National
Association of Wheat Growers, which represents wheat producers.
In August, the USDA predicted net farm income in 2016 would
fall 11.5 percent from 2015 to $71.5 billion because of low
commodity prices. If realized, that would be the lowest since
It also would mean that USDA's safety-net payments accounted
for about 10 percent of net farm income for 2016.
The payments will help farmers "who are standing strong
against low commodity prices," USDA Secretary Tom Vilsack said
in the statement. He added that the agency will "continue to
ensure the availability of a strong safety net" for growers.
Payments will be made to farmers who enrolled acres of corn,
soybeans, wheat, barley, grain sorghum, lentils, oats, peanuts,
dry peas and canola under two USDA programs, called Agriculture
Risk Coverage and Price Loss Coverage.
They "primarily allow producers to continue to produce for
the market" when crop revenues or prices decline, according to
Additional payments for producers of other commodities, such
as rice, will be announced later, the USDA said.
Last year, the agency paid farmers $5.2 billion under the
programs to cover weak markets in 2014.
(Reporting by Tom Polansek; Editing by Sandra Maler and Tom