American Relief Act of 2025 Provides Ad Hoc Relief to Farmers While Extending Farm Bill

January 8, 2025 | Kristine A. Tidgren

The 2018 Farm Bill (Agricultural Improvement Act of 2018) has been temporarily revived. On December 21, 2024, Congress enacted the American Relief Act of 2025, P.L. 118-158, which averted a government shutdown and extended the Farm Bill for the second time in two years. This extension allows programs generally to continue through September 30, 2025, but extends commodity programs through the 2025 crop year. Additionally, the Act allocated $30.78 billion to the USDA for farm relief. Of those funds, Congress directed $20 billion to assist farmers who have suffered natural disasters in 2023 and 2024 and $10 billion to provide economic assistance to farmers because of expected economic losses incurred in growing 2024 commodities.  

Disaster Relief Payments

It is likely that the 2023 and 2024 disaster relief payments will be like the Economic Relief Program (ERP) payments made for prior disaster years, although the USDA has yet to release details. The law states that the aid may be used for necessary expenses related to losses of revenue, quality or production of crops, trees, bushes and vines as a consequence of droughts, wildfires, hurricanes, floods, derechos, excessive heat, tornadoes, winter storms, freeze, including a polar vortex, smoke exposure, and excessive moisture occurring in calendar years 2023 and 2024 under such terms and conditions as determined by the Secretary of Agriculture. Crops are defined to include milk, on-farm stored commodities, crops prevented from planting and harvested adulterated wine grapes.  

Of the $20.78 billion directed to disaster assistance, the Act specifies that up to $2 billion must be used to cover livestock losses due to drought, wildfires and floods and $3 million must be used to carry out regular testing of molasses at U.S. ports of entry.

Economic Assistance Payments

The Act directs the USDA to make the economic assistance payments to farmers within 90 days (mid-March). Eligible crops include wheat, corn, grain sorghum, barley, oats, upland cotton, extra long staple cotton, long grain rice, medium grain rice, peanuts, soybeans, other oilseeds, dry peas, lentils, small chickpeas, and large chickpeas. The law directs payments to be made pursuant to a per acre formula, which is the greater of:

  • 26 percent of the commodity’s estimated loss (expected cost of production minus expected gross return) OR
  • 8 percent of the statutory reference price for the eligible commodity x national average payment yield  

Based upon this formula, most of the aid from this program will flow to producers of corn, soybeans, and wheat. Economists have estimated that per acre payments should range from more than $40 per acre for corn, just under $30 for soybeans, and just over $30 for wheat.[i]

The law provides for a separate payment limitation for the economic assistance payments. Persons or legal entities can receive up to $125,000 from the economic assistance payment program in addition to any other farm program payments. This payment limitation doubles to $250,000 if the payee’s average gross income from farming for 2020, 2021, and 2022 is 75 percent or more of their average gross income from all sources. Note this is average revenue, not average adjusted gross income, which has been the standard measure for prior limitations formulas.

Farmers should watch for updates from the USDA-FSA about this new program.

Farm Bill Program Extension

While the Act’s Farm Bill extension authorizes both mandatory and discretionary Farm Bill programs at least through September 30, 2025, it did not fund 21 2018 Farm Bill mandatory programs that did not have a budget baseline. See CRS InFocus IF12115, Farm Bill Primer: Programs Without a Budget Baseline for more information on these programs.  

The Act’s extension did reauthorize and fund crop and dairy safety-net programs for the 2025 crop year.

Update: On January 13, 2025, USDA announced that agricultural producers can submit applications for Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) for the 2025 crop year from January 21 to April 15 and for the Dairy Margin Program (DMP) for the 2025 coverage year from January 29 to March 31.  

Farm Bill Future

The 119th Congress has new leadership, which means a change of the guard for Farm Bill negotiations. Senator John Boozman (R-Arkansas) is the new Chairman of the Senate Agriculture Committee, while Senator Amy Klobuchar (D-Minnesota) replaces retired Senator Debbie Stabenow (D-Michigan) as the top Democrat on that committee. On the House side, Representative Glenn “GT” Thompson (R-Pennsylvania) remains Chairman of the House Agriculture Committee, while Representative Angie Craig (D-Minnesota) replaces Representative David Scott (D-Georgia) as the ranking member of that committee.  While all leaders have stated that passing a Farm Bill in 2025 is a top priority, it will not be an easy task given the many issues facing the 119th Congress. Some key issues include SNAP funding, crop reference prices, expanding safety net programs, climate-smart conservation funding, and crop insurance.

We will provide updates as they arise.