Direct subsidy
Direct agricultural subsidies in the United States are paid by the Farm Service under the Federal Department of Agriculture. John Whitaker, director of Iowa Office of Farm Service Bureau, told reporters that there are two main projects of direct subsidy, one is direct and countercyclical payment, and the other is soil and water conservation.
Direct and countercyclical payment projects are designed by the United States to encourage farmers to grow food. It provides cash subsidies to farmers who grow food crops such as soybeans and corn, and it is divided into two parts: direct payment and countercyclical payment. The amount of direct subsidies paid is very limited, for example, the current corn subsidy is US$ per bushel and the soybean subsidy is US$ per bushel. In 20 1 1 year, the US federal government paid a total of US$ 100 million in direct subsidies. The US Congress is currently drafting a farm bill for the next five years, and the new farm bill is likely to eliminate direct subsidies.
Only when the market price is lower than about half of the average level in the past five years will the countercyclical payment be started, so as to ensure that farmers can still get 50% of the expected income once the food price falls unexpectedly, so as to continue their production and life.
Soil and water conservation project is a project designed by the United States to protect the rural environment. If the land owned by farmers belongs to environmentally sensitive areas, such as wetlands or animal habitats, the government hopes to sign a land lease contract with farmers for a period of 10, suspend agricultural production in this area, and provide some funds to improve the local environment. Farmers can voluntarily decide whether to participate in this project, and the rent is determined by both parties. 20 1 1 year, the US federal government's expenditure on soil and water conservation projects reaches 1 billion US dollars.
indirect subsidies
Government indirect subsidies includes low-interest agricultural loans and agricultural insurance subsidies.
The core principle of low-interest agricultural loans is to help entrepreneurial farmers or vulnerable farmers engage in agricultural production. It is often difficult for this group to obtain commercial loans. Low-interest agricultural loans provided by the government are mainly used to fill the gap of commercial banks in this market.
Low-interest agricultural loans are also handled by the Farm Service Bureau, including direct loan projects and loan guarantee projects. Direct loans are funded by Congress, and the interest rate is usually lower than that of commercial loans, which fluctuates with market conditions. The funds and services of the loan guarantee project are provided by the commercial banking system, the interest rate is determined by the borrower and the commercial banking institution, and the farm service bureau provides guarantee for the loan.
For sudden major natural disasters, the Farm Service Bureau also provides low-interest emergency loans, and the applicant's loss must exceed 30% of the previous year's profit.
According to the research report of the Economic Research Institute of the US Department of Agriculture, the loan provided by the Farm Service Bureau only accounts for% of the agricultural credit market, while commercial banks account for% and agricultural cooperatives account for%.
Bill Nosey, Agriculture Minister of Iowa in the Midwest of the United States, told reporters that agricultural insurance is the most important measure to ensure agricultural production and the core of the government's agricultural support policy. Scott lovett, who runs a 3,500-acre farm in Iowa, also pointed out that direct government subsidies now account for less than 5% of income. Compared with this, agricultural insurance plays a more critical role.
Agricultural insurance in the United States is the responsibility of the Risk Management Bureau of the Ministry of Agriculture, and farmers participate voluntarily. The federal government provides premium subsidies for insured farmers, but the insurance business is undertaken by private commercial insurance companies. In 20 1 1 year, the American federal crop insurance program provided farmers with 2.07 million policies, and the subsidy cost was as high as 6.8 billion US dollars.
The federal subsidy for agricultural insurance in the United States is mainly divided into two parts: one is the premium subsidy, and the other is the business expense subsidy.
In terms of premium subsidies, the proportion of subsidies is inversely proportional to the proportion of insured output. Specifically, the catastrophe insurance premium that causes the output to be less than 50% is subsidized by the federal government 100%. Since then, with the increase of the coverage of output insurance chosen by farmers, the proportion of subsidies from the federal government has gradually declined.
In terms of operating expenses subsidies, the Federal Crop Insurance Company of the United States provides a certain proportion of management and operating expenses subsidies to private insurance companies undertaking federal crop insurance projects. In addition, the United States also provides policy support for private agricultural insurance companies in three aspects: first, it provides reinsurance to private insurance companies through the federal crop insurance company; Second, the federal government, state governments and other local governments are exempt from all taxes on agricultural insurance; Third, the federal government encourages state governments to provide premium subsidies through laws to further reduce the burden on farmers and improve the attractiveness of agricultural insurance.