29. United States

Support provided to agricultural producers in the United States consistently measures below the OECD average. Producer support declined from 19.5% of gross farm receipts in 2000-02 to 12% in 2018-20. The share of potentially most-distorting transfers was 32% in 2018-20, also below the OECD average and lower than in 2000-02. On average, prices received by farmers in 2018-20 were 4% higher than in world markets, largely as a result of market price support (MPS) for milk, sugar and to a lesser extent sheep meat. Border measures (including tariff rate quotas) protect these commodities. Producer prices of other commodities mostly align with border prices.

MPS has become a progressively smaller share of US support to agriculture, while budgetary support increased over time, due mainly to increases in payments that require production (reflecting the emphasis placed on farm insurance and risk management), as well as increases in input payments. Reflecting that crop insurance and the primary crop commodity programmes are counter-cyclical to market prices, budgetary support relates inversely to market price developments. Budgetary support peaked when world commodity prices were depressed (in terms of USD), while high commodity prices after 2007-08 contributed to lower levels of support.

Support to consumers accounts for close to half of total support to US agriculture as a result of US domestic food assistance programmes. Expenditures for general services (GSSE) were equivalent to 6.1% of agricultural value added in 2018-20, up from 5.2% in 2000-02 and slightly above the OECD average. Total support to agriculture was 0.5% of GDP in 2018-2020.

Implementation of the Agriculture Improvement Act of 2018 (2018 Farm Bill) continued during 2020, along with continued implementation of the 2019 suite of trade mitigation programmes, and 2018 and 2019 Congressional ad hoc disaster assistance programmes with 2020 supplements. On trade mitigation, in February 2020, the United States Department of Agriculture (USDA) announced the third and final tranche of payments under the 2019 Market Facilitation Program (MFP). The MFP provided up to USD 14.5 billion to producers of commodities affected by the loss of traditional export markets resulting from retaliatory tariffs. The February 2020 payments provided the remaining 25% of authorised payments.

On disaster assistance, in December 2019, the Further Consolidated Appropriations Act 2020 provided an additional USD 1.5 billion for disaster assistance programme delivery, and added several new qualifying disaster events and eligible participants under the Wildfire and Hurricane Indemnity Program Plus (WHIP+). In addition, USDA’s Risk Management Agency (RMA) introduced a policy to help producers recover from hurricanes. The Hurricane Insurance Protection-Wind Index (HIP-WI) Endorsement covers 70 crops and is available in counties near the Gulf of Mexico, Atlantic Ocean and Hawaii. Sustained hurricane-force winds from a named hurricane are the only cause of loss recognised for HIP-WI.

Several trade agreements came into force in 2020: the Japan-US Free Trade Agreement, the United States-Mexico-Canada Agreement and the “Phase One” Trade Agreement with the People’s Republic of China (hereafter “China”).

The USDA implemented a series of policies to address the COVID-19 pandemic. On support for producers, the Coronavirus Farm Assistance Program (CFAP), provided around USD 23.5 billion in direct income payments to farmers and ranchers. CFAP provided financial assistance based on actual losses to producers of agricultural commodities who faced price declines due to COVID-19, and significant additional marketing costs because of lower demand, surplus production, and disruptions to shipping patterns and the orderly marketing of commodities. The programme covered over 300 commodities, from livestock and row crops to specialty crops and aquaculture. CFAP was implemented through two payment rounds (CFAP-1 and CFAP-2) based on separate eligibility requirements and payment formulas. The USDA’s Farm Service Agency (FSA) broadened use of the Disaster Set-Aside loan provision to allow farmers with USDA farm loans who were affected by COVID-19 to have a payment set aside. FSA also made available a one-time option for an annual instalment payment deferral of Farm Storage Facility Loans. USDA’s RMA provided crop insurance programme flexibilities to assist producers affected by COVID-19 market disruptions.

COVID-specific support for consumers included commodity distribution programmes and additional funding for USDA domestic food assistance programmes. On commodity distribution, the USDA partnered with regional and local distributors whose workforce had been significantly impacted by the closure of restaurants, hotels, and other food service entities to purchase and distribute USD 4 billion in fresh produce, dairy and meat products through the Farmers to Families Food Box Program. The USDA Secretary authorised USD 470 million in additional Section-32-funded food purchases for distribution to communities in response to the COVID-19 national emergency. The USDA also issued Disaster Household Distributions, a food assistance programme that provides food to meet specific needs when traditional channels are unavailable.

On domestic food assistance programmes, the USDA allowed States to issue benefits to households in the Supplemental Nutrition Assistance Program (SNAP) that normally receive less than the maximum benefit, and to provide programme flexibilities for SNAP issuance methods, and application and reporting requirements. A pre-planned online purchasing pilot for SNAP participants was also expanded as part of the USDA’s COVID-19 response. The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) programme received an additional USD 500 million in appropriations during the COVID-19 health emergency. The USDA gave states the option to allow parents or guardians to take meals served under the Child and Adult Care Food Program home to their children and provided other means of getting meals to children who normally receive free or reduced-price meals at school.

  • Levels of producer support and border protection decreased in the early 2000s. However, low levels of support primarily reflected higher world commodity prices, as many agricultural support programmes are counter-cyclical to market prices, and producer support has increased in recent years.

  • Increased emphasis on insurance and risk management policy tools is, in principle, a good approach to supporting producers when they are in need. However, most insurance programmes remain commodity-specific. Moving to an all farm-revenue approach would exploit differences in price and yield variability across products, reducing government costs for a given objective, and also remove distortions across commodity sectors. Risk management instruments should also be evaluated for their impact on farm-level incentives to adapt and transform in response to a changing risk environment and ensure that they do not transfer risk that should be borne by farmers to the public budget.

  • Voluntary conservation programmes – such as the Environmental Quality Incentives Program (EQIP) and the programmes consolidated into the Agricultural Conservation Easement Program (ACEP) appear to be effective in addressing soil conservation and water pollution problems. However, conservation programmes could be better leveraged to improve ex ante management of natural hazard risk and support a more resilient recovery following a natural hazard event (Gray and Baldwin, 2021[1]).

  • Recent Farm Bills continue support for farm incomes and strengthen the risk management system to build farmers’ resilience against natural disasters and market shocks. It will be important to ensure that the recent return to providing ad hoc support does not become entrenched, so as to not dis-incentivise necessary adjustments to new market and environmental conditions or undermine the ex ante framework established by agricultural risk management and disaster assistance policies.

  • While a high rate of productivity growth – driven by farm consolidations and adoption of innovations – helps keep US agro-food exports competitive, future opportunities will also be determined by access to markets facilitated by trade agreements. Resolving current trade uncertainties will be important to ensure that farmers can pursue available market opportunities.

An omnibus legislative package known as the Farm Bill primarily governs agricultural policy in the United States. Farm Bills authorise agricultural and food policies in areas including nutrition assistance, crop insurance, commodity support, conservation and agricultural research. Each Farm Bill amends previous agricultural and related policies, and establishes new policies on a five-year cycle that can be extended or shortened depending on legislative priorities.

Historically, the commodity support component of Farm Bills focused on stabilising and boosting farm income to aid economic recovery and development during the Depression and post-war eras through price and income support for a specified set of commodities, including but not limited to corn, soybeans, wheat, cotton, rice, peanuts, dairy, and sugar (OECD, 2011[2]). Over time, Farm Bills expanded in scope: the 1973 Farm Bill first included a nutrition title while subsequent farm bills added titles on policy areas such as agricultural trade, farm credit, rural development and crop insurance. The 1985 Farm Bill added conservation provisions; the 1990 Farm Bill, organic agriculture; the 1996 Farm Bill, agricultural research ; the 2002 Farm Bill, bioenergy; and the 2008 Farm Bill, horticulture and local food systems (Congressional Research Service, 2019[3]).

Agricultural policy reform in the United States has been characterised by a significant shift towards less production- and trade-distorting forms of support. Commodity programmes originally supported farm incomes through a combination of taxpayer-funded production payments and supply management in the form of acreage limits and commodity storage programmes. The Food Security Act of 1985 introduced changes that moved farmers towards more market orientation by reducing price supports in favour of direct payments, introducing greater planting flexibility and giving more attention to export opportunities for US farm products (OECD, 2011[2]).

Reforms continued with subsequent Farm Bills. The 1996 Farm Bill1 re-designed income support programmes by replacing target prices, price-based deficiency payments and acreage controls with historically based direct payments independent of current production. A series of ad hoc emergency top-up payments supplemented the historically based payments implemented under the 1996 Farm Bill to provide additional assistance in the face of low commodity prices. These ad hoc payments were institutionalised under the 2002 Farm Bill2 as counter-cyclical payments linked to the historically based direct payments, and continued under the 2008 Farm Bill3 (OECD, 2011[2]). The 2014 Farm Bill ended these direct and counter-cyclical payments but continued direct income support based on historical production with programmes triggering payments based on either reference prices or revenue benchmarks. It also ended the dairy price support programme, replacing it with a premium-based milk-to-feed margin protection programme. The 2018 Farm Bill continued these programmes with only small adjustments (Table 29.2).

The largest of the farm programmes in the Farm Bill, the Federal Crop Insurance Program (FCIP), was established in the 1930s to cover yield losses from most natural causes.4 The programme’s current form was authorised by the Federal Crop Insurance Act of 1980 and modified by subsequent Farm Bills and other legislation. The 1980 act introduced federal premium subsidies and brought in private insurance companies (Approved Insurance Providers, or AIPs) to deliver crop insurance policies. The catastrophic (CAT) coverage level was created in 1994, under which 100% of the premium is subsidised and producers pay a fee.5 The Agricultural Risk Protection Act of 2000 expanded the geographic availability of insurance, increased premium subsidy levels, and removed restrictions on livestock insurance products.

Producer support increased in recent years after declining since 2000-02. MPS became a progressively smaller share of US support to agriculture. Budgetary support increased over time, mainly due to increases in payments that require production (reflecting the increasing emphasis placed on farm insurance and risk management, including the Federal Crop Insurance Program), as well as increases in input payments and payments not requiring production (Figure 29.4).

The Agricultural Improvement Act of 2018 (the 2018 Farm Bill) provides the basic legislation governing farm programmes for 2019 to 2023. The twelve titles of the 2018 Farm Bill authorise policies for commodity programmes, conservation on agricultural land, agricultural trade promotion and international food aid, nutrition programmes, farm credit, rural development, agricultural research, forestry on private lands, energy, horticulture and organic agriculture, and crop insurance. Around 76% of budgetary spending under the 2018 Farm Bill is projected for programmes in the Nutrition title – primarily the Supplemental Nutrition Assistance Program (SNAP) – with farm programmes accounting for less than 25% of projected budgetary outlays. Of the farm programmes, crop insurance is projected to account for 9% of total expenditures, and Commodities and Conservation for 7% each. The remaining titles together account for 1% of projected spending.

The primary crop commodity programmes under the 2018 Farm Bill include programmes that make payments to producers with historical base acres6 of programme crops (wheat, feed grains, rice, oilseeds, peanuts, pulses and seed cotton) when prices fall below statutory minimums or when crop revenue is low relative to recent levels. Producers are not required to produce the covered commodity to receive payments on their historical base. Price Loss Coverage (PLC), a counter-cyclical price programme, makes a payment when market prices for covered crops fall below fixed reference prices. Agriculture Risk Coverage (ARC), a revenue-based programme, makes a payment when actual revenue at the county level falls below rolling average benchmark revenues. For both programmes, payments are made on 85% of base acres. For their base acre elections, participating producers are required to choose between the PLC and ARC programmes on a commodity-by-commodity basis that holds for both 2019 and 2020, and then annually for each year through 2023.

The crop insurance programme offers coverage options for both yield and revenue losses. Traditional crop insurance makes subsidised crop insurance available to producers who purchase a policy to protect against losses in yield, crop revenue, or whole farm revenue. The 2018 Farm Bill expanded the list of insurable commodities to include hemp.7 In addition, the Supplementary Coverage Option (SCO) offers producers additional area-based insurance coverage in combination with traditional crop insurance policies (but excluding crops for which producers have elected to participate in the ARC programme). The Stacked Income Protection Plan (STAX) provides premium subsidies to upland cotton producers to purchase area-based revenue insurance policies. Producers who choose to enrol former upland cotton base acres as seed cotton base (seed cotton became a covered commodity under the PLC and ARC programmes as a result of the Bipartisan Budget Act of 2018) are not eligible to purchase STAX policies. Participants in the STAX programme may not purchase SCO policies for the same upland cotton acreage.

Sugar is supported by a tariff rate quota (TRQ), together with provisions for non-recourse loans and marketing allotments. Minimum prices with government purchases of butter, skim milk powder and cheddar cheese no longer support milk and dairy products, but tariffs and TRQs continue to exist. For dairy producers, the Dairy Margin Coverage (DMC) programme, insures the margin between milk price and feed costs for a premium, with payments made on enrolled historical milk production. The 2018 Farm Bill also allows producers to participate in both DMC and dairy livestock insurance programmes. Under the new Milk Donation Reimbursement Program (MDP) fluid milk producers with pre-approved plans may be reimbursed for costs incurred in donating fluid beverage milk to low-income groups. Marketing assistance loans continue for wheat, feed grains, cotton, rice, oilseeds, pulses, wool, mohair and honey, as do border measures (including TRQs) for beef and sheep meat and some other products, although US agricultural tariffs are generally low, at 4.7% on average in 2019.8

At the federal level, agri-environmental programmes focus on land retirement and measures to encourage crop and livestock producers to adopt practices that reduce environmental pressures on working land (cropland and grazing land in production). Working land programmes include the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP). Land retirement programmes include the Agricultural Conservation Easement Program (ACEP) and the Conservation Reserve Program (CRP). The Regional Conservation Partnership Program offers options for regionally or watershed focused conservation efforts that may combine both land retirement and working lands programmes. Since the enactment of the 1985 Farm Act, eligibility for most federal commodity programme payments, including crop insurance premium subsidies, is subject to recipients having established an individual farm-based conservation plan to protect highly erodible cropland and wetlands.

Other farm programmes include direct and guaranteed loans (including microloans) for farmland purchase and for operating credit, designed to assist producers who face difficulty obtaining credit in the private market, particularly beginning, military veteran and socially disadvantaged farmers. Farm Bill programmes also support public agricultural research and technical assistance, including programmes targeted to specialty crops; organic production; pest and disease prevention; the promotion of sustainable farming practices; and standing disaster programmes for livestock, forage, and trees, bushes and vines to help producers cope with production, financial and physical losses related to or caused by natural disasters.

Production of ethanol and other biofuels is supported mainly in the form of mandated blending for fuel use, and loan and grant programmes.

A wide range of other legislation also affects agriculture in the United States at federal, state and local levels, including trade measures, food safety regulation, commodity trading and finance, tax policy, energy, and transportation.

The United States continually works to enhance agricultural productivity, including under increasing climate variability and extreme weather events. To support adaptation to climate change, The USDA operates a network of Regional Climate Hubs. These link USDA research and programme agencies in order to develop and deliver science-based, region-specific information and technologies to agricultural producers and professionals, so as to enable climate-informed decision-making and direct stakeholders towards resources needed to implement those decisions.

USDA also helps producers reduce GHG emissions, enhance carbon sequestration and adapt to a changing climate while improving the natural resource base by providing technical and financial assistance to landowners through its conservation programmes. For example, the Soil Health Initiative promotes and supports adoption of soil health practices and systems through various conservation programmes, including EQIP and CSP.

Implementation of provisions of the Agriculture Improvement Act of 2018 (2018 Farm Bill) continued during 2020, accompanied by continued implementation of the 2019 suite of trade mitigation programmes and the 2018 and 2019 Congressional ad hoc disaster assistance programmes with 2020 supplements. Most prominently, however, USDA implemented a series of policies to address the COVID-19 pandemic, including producer programmes, food assistance programmes, and regulatory flexibilities along the supply chain. Several trade agreements came into force in 2020: the Japan-US Free Trade Agreement, the United States-Mexico-Canada Agreement, and the “Phase One” Trade Agreement with China.

On trade mitigation, in February 2020, USDA announced the third and final tranche of payments under the 2019 Market Facilitation Program (MFP). The MFP provided payments up to USD 14.5 billion in three tranches to producers of commodities affected by retaliatory tariffs resulting in the loss of traditional export markets, including non-specialty crops, hogs, milk, and certain specialty crops (fresh sweet cherries, tree nuts, fresh grapes, cranberries, and cultivated ginseng). The February 2020 payments were the last of three tranches of MFP payments, providing the remaining 25% of authorised payments.

On disaster assistance, in December 2019, the Further Consolidated Appropriations Act, 2020 provided an additional USD 1.5 billion for the continuation of disaster assistance programme delivery and added several new qualifying disaster events and eligible participants under the WHIP+ programme (OECD, 2020[8]). These were losses from excessive moisture or drought suffered in 2018 and 2019; compensation to grower members of sugar beet co-operatives for sugar beet losses in 2018 and 2019; and crop quality losses that resulted in price deductions or penalties when marketing the damaged crops due to qualifying disaster events in 2018 and 2019.

On crop insurance, USDA’s Risk Management Agency (RMA) introduced a new policy in 2020 that will help producers recover from hurricanes. The Hurricane Insurance Protection – Wind Index (HIP-WI) covers 70 different crops and is available in counties near the Gulf of Mexico and the Atlantic, as well as Hawaii. The policy covers a portion of the deductible of a producer’s underlying crop insurance policy when their county, or an adjacent county, is within the area of sustained hurricane-force winds, as determined by National Oceanic and Atmospheric Administration (NOAA) hurricane wind extents data. Sustained hurricane winds are the only cause of loss for HIP-WI.

On organic agriculture, the United States and Taiwan signed a new organic equivalence arrangement allowing organic products certified in the United States or Taiwan to be sold as organic in either market, and the United States and Japan announced the expansion of their organic equivalence arrangement to include livestock products. The United States has organic equivalence arrangements with Canada, the European Union, Japan, Korea, Switzerland, and Taiwan.

On agricultural biotechnology, USDA’s Animal and Plant Health Inspection Service (APHIS) published the Sustainable, Ecological, Consistent, Uniform, Responsible, Efficient (SECURE) rule, the first comprehensive revision of the Agency’s biotechnology regulations in over 30 years. The new rule will facilitate the development and availability of these technologies through a transparent, consistent, science-based, and risk-proportionate regulatory system. Specifically, the new rule puts in place a more efficient process to identify plants that would be subject to regulation, focusing on the properties of the plant rather than on its method of production. APHIS will evaluate plants developed using genetic engineering for plant pest risk under a new process called a regulatory status review, regulating only those that plausibly pose an increased plant pest risk.

On natural resources and environmental measures, the new Conservation Reserve Program (CRP) Soil Health and Income Protection Program (SHIPP) pilot, authorised under the 2018 Farm Act, was launched in 2020. The programme is available to producers in Iowa, Minnesota, Montana, North Dakota and South Dakota. Through SHIPP, producers have the option of three-, four- or five-year CRP contracts to establish perennial cover on less productive cropland in exchange for payments. This pilot enables producers to plant perennial cover that, among other benefits, will improve soil health and water quality while having the option to harvest hay and graze during certain times of the year. Up to 50 000 acres can be enrolled.

Also on natural resources, the new CRP CLEAR30 Program offers farmers and landowners with expiring water-quality practice CRP contracts in the Great Lakes and Chesapeake Bay regions the opportunity to enrol in a 30-year CRP contract. The longer contracts will help ensure that practices remain in place for 30 years, which will help reduce sediment and nutrient runoff and help prevent algal blooms. Traditional CRP contracts run from 10 to 15 years.

On biofuels, in February 2020, the USDA announced the new Higher Blends Infrastructure Incentive Program (HBIIP). The HBIIP makes USD 100 million in grants available for transportation fuel and biodiesel distribution facilities to retrofit or upgrade fuel storage, dispenser pumps, and related infrastructure to be able to sell ethanol and biodiesel. The programme builds on biofuels infrastructure investments and experience gained through the Biofuels Infrastructure Partnership (BIP) administered by USDA from 2016–19 (OECD, 2016[9]), which awarded competitive grants, matched by states, to expand the availability of E15 and E85 infrastructure.

On local and regional food systems, in 2020 USDA’s new Office of Urban Agriculture and Innovative Production announced the first grants under its competitive grants programme. The programme was authorised by the 2018 Farm Bill to address food access and education and innovative ways to increase local food production in urban environments. USDA awarded USD 1.44 million for planning projects that target areas of low food access, provide job training and education, business and start-up costs for new farmers, and the development of policies related to zoning and other needs of urban production. An additional USD 1.88 million was awarded to implement projects that accelerate existing and emerging models of urban, indoor and other agricultural practices that serve multiple farmers.

On food loss and waste, the Office of Urban Agriculture and Innovative Production announced just over USD 1 million in funding for 13 pilot projects through its Community Compost and Food Waste Reduction Projects programme, to develop and test strategies for planning and implementing municipal compost plans and food waste reduction. Priority projects anticipate or demonstrate economic benefits, incorporate plans to make compost easily accessible to farmers (including community gardeners), integrate other food waste strategies (including food recovery efforts), and collaborate with multiple partners.

Most programmes to address COVID-related disruptions in the US agricultural and food system are funded by COVID-specific authorising legislation, including the Families First Coronavirus Response Act (FFCRA), which was enacted on 18 March 2020, and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which was enacted on 27 March 2020.9 The CARES Act provided USD 9.5 billion in disaster relief to prevent, prepare for, and respond to coronavirus by supporting agricultural producers impacted by COVID-19, including producers of specialty crops, producers that supply local food systems (such as farmers markets, restaurants, and schools), and livestock producers (including dairy producers). The CARES Act provided USD 14 billion to replenish the borrowing authority for the Commodity Credit Corporation (CCC).10 In addition, the Consolidated Appropriations Act, 2021, which was enacted on 27 December 2020, provides additional funding for COVID-19 programmes that will be implemented in 2021. USDA also used existing authorities under the Commodity Credit Corporation (CCC) Charter Act to respond to COVID-19.

On COVID-specific support for agriculture, a new USDA programme, the Coronavirus Farm Assistance Program (CFAP), provided around USD 23.5 billion in direct income payments to farmers and ranchers. CFAP provided financial assistance based on actual losses to producers of agricultural commodities who had faced price declines due to COVID-19 and additional significant marketing costs because of lower demand, surplus production, and disruptions to shipping patterns and the orderly marketing of commodities. The programme covered over 300 eligible commodities, from livestock and row crops to specialty crops and aquaculture. CFAP funding was authorised through the CARES Act (USD 9.5 billion) as well as USD 14 billion in funding provided through the Commodity Credit Corporation (CCC) Charter Act. Approximately USD 500 million of the CARES Act funds were used for the Farmers to Families Food Box programme described below, and actual outlays of additional CCC funds remained below the total authorised at the end of 2020. CFAP was implemented through two payment rounds (CFAP-1 and CFAP-2) based on separate eligibility requirements and payment formulas.

USDA also introduced flexibilities into its programmes and services in response to the COVID-19 pandemic and as part of its implementation of the CARES Act.

On farm finance and credit, USDA’s Farm Service Agency (FSA) broadened the use of the Disaster Set-Aside loan provision, normally used in the wake of natural disasters, to allow farmers with USDA farm loans who were affected by COVID-19 to have a payment set aside. To assist Farm Storage Facility Loan borrowers experiencing financial hardship from the pandemic and other challenges in production agriculture, a one-time option for an annual instalment payment deferral was made available.

On crop insurance, USDA’s RMA provided administrative flexibilities to protect the health and safety of crop insurance programme participants, including insurance providers, as well as more substantial programme flexibilities to assist producers affected by COVID-19 market disruptions. These included:

  • Allowing dairy producers who were forced to dump milk as a result of government-ordered shutdowns to report that milk as marketed for insurance purposes.

  • Allowing organic producers to report acreage as certified organic, or transitioning to organic, for the 2020 crop year if they can show that they have requested a written certification from a certifying agent by their policy’s acreage reporting date.

USDA also extended the repayment period for agricultural producers to repay Marketing Assistance Loans (MAL) from 9 to 12 months.

On farm labour, in April 2020, the Department of Homeland Security along with the USDA announced a temporary rule change to H-2A visa requirements to help agricultural producers to avoid disruptions in their labour force. The H-2A visa applies to foreign workers who perform agricultural labour on a temporary or seasonal basis before returning to their home countries. The temporary change in rules allows foreign workers who are already in the United States to change employers more quickly and easily, as well as stay beyond the three-year maximum allowable period.

On animal health, as the national animal health reference laboratory, USDA’s APHIS established confirmatory testing services for animal samples for SARS-CoV-2 and tested more than 500 animals for the virus, confirming 66 animals as positive. APHIS also worked with 37 laboratories in the National Animal Health Laboratory Network (NAHLN) to get them set up for added COVID-19 testing services, including 22 with capability to test human samples, and collaborated closely with both animal and public health officials on a variety of COVID-19 related projects. Additionally, APHIS created a National Incident Coordination Center to support producers impacted by COVID-19 closures and slowdowns at meat processing plants. As part of these efforts, the National Veterinary Stockpile quickly deployed more than USD 2.24 million worth of critical equipment, supplies and services to directly support affected producers.

On COVID-specific support for agro-food supply chains, in April 2020, President Trump issued an executive order under the Defense Production Act authority to keep meat and poultry processing facilities operating during COVID-19. The President directed the Secretary of Agriculture to take all appropriate actions to ensure that meat and poultry processors continued operations, consistent with the guidance for their operations jointly issued by the Centers for Disease Control (CDC) and the US Department of Labor’s (DOL) Occupational Safety and Health Administration (OSHA), to ensure that the plants can operate safely.

In May 2020, USDA and the Food and Drug Administration (FDA) established a Memorandum of Understanding to clarify procedures in order to “prevent interruptions at FDA regulated food facilities,” including fruit and vegetable processing facilities.

COVID-specific support for consumers included commodity distribution and additional funding for USDA domestic food assistance programmes.

On commodity distribution, as part of CFAP and using funding authorised under the Families First Coronavirus Response Act (FFCRA) and the CARES Act, in 2020 USDA partnered with regional and local distributors whose workforce had been significantly impacted by the closure of many restaurants, hotels, and other food service entities. USDA purchased and distributed USD 4 billion in fresh produce, dairy and meat products through the Farmers to Families Food Box Program. The programme delivered more than 125 million pre-approved, family-sized boxes of fresh produce, dairy and meat products to food banks and other non-profits serving low-income households.

CFAP programme funding also provided more than USD 850 million (USD 400 million through FFCRA and USD 450 million through the CARES Act) to make additional purchases for distribution through The Emergency Food Assistance Program (TEFAP), an ongoing programme that provides emergency food assistance to low-income families through food banks and other nutrition assistance programmes.

US Secretary of Agriculture Sonny Perdue authorised USD 470 million in additional Section 32-funded food purchases11 for distribution to communities in need in response to the COVID-19 national emergency. USDA also issued Disaster Household Distributions, a food assistance programme that provides food targeted to meet specific needs when traditional channels of food are unavailable. Distributions were made to 16 states and territories and 29 tribal governments.

On USDA domestic food assistance programmes, under FFCRA authority, USDA allowed States to issue benefits to Supplemental Nutrition Assistance Program (SNAP) households that normally receive less than the maximum benefit, and to provide programme flexibilities for SNAP issuance methods, application, and reporting requirements. These modifications are applicable during the COVID-19 health emergency. USDA’s Food and Nutrition Service (FNS) rapidly expanded a pre-planned online purchasing pilot for SNAP participants as part of its COVID-19 response. Within six weeks of its launch in New York in mid-April, USDA had expanded SNAP online purchasing to 36 states and the District of Columbia, covering 90% of SNAP households, and eventually reaching an additional 10 states and covering more than 97% of SNAP beneficiaries. SNAP spending increased 52% in FY2020 to USD 84.8 billion.

The FFCRA provided an additional USD 500 million in appropriations for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) programme during the COVID-19 health emergency. WIC provides supplemental foods, nutrition education, breastfeeding promotion and support, and health care referrals to low-income pregnant, postpartum, and breastfeeding women, infants, and children under five who are determined by health professionals to be at nutritional risk. FNS used programme flexibilities and waiver authorities provided by Congress to facilitate participation, in particular by allowing for remote approval of participants and flexible options for receiving benefits and picking up food packages.

USDA provided states the option to allow parents or guardians to take meals home to their children being served under the Child and Adult Care Food Program. Typically, children would need to be present at school to receive a meal through this programme. Flexibilities were also provided to assist seniors and individuals with disabilities served through the same programme.

USDA’s FNS also provided alternative means of getting meals to children who would normally receive free or reduced-price meals at school. A new programme called Pandemic EBT (Electronic Benefits Transfer)12 provided for the electronic transfer of funds to households to cover the cost of meals children would normally receive at school. The Emergency Meals to You programme, a public-private partnership, delivered more than 40 million meals to approximately 400 000 children in rural areas during 2020 school and summer meal programme closures. Various programme flexibilities, including allowing parents and guardians to pick up meals rather than requiring children to be served meals in group settings, provided local schools and meal programme operators with the option to tailor their offerings to community needs. Programme flexibilities also allowed states and local school districts to develop hybrid in-school and alternative meal strategies. USDA also developed a Meals for Kids interactive site finder to help parents and children locate sites and meal service times.

USDA also provided additional food distributions through the Food Distribution Program on Indian Reservations (FDPIR), a programme which provides USDA Foods to eligible households living on Indian reservations and to American Indian households residing in approved areas near reservations and throughout the state of Oklahoma. Many households participate in FDPIR as an alternative to SNAP because they do not have easy access to SNAP offices or authorised food stores. Up to USD 50 million in CARES Act funds have also been made available to tribal governments for COVID-related infrastructure costs, such as personal protective equipment, freezers/coolers, mobile IT equipment, tailgate equipment, and vehicles for home deliveries.

The Japan-US Free Trade Agreement went into effect on 1 January 2020, providing for 5 to 15 year phase-in periods for tariff reductions on canola oil, wheat, beef, pork, feed grains, and oilseeds (USTR, 2019[10]).

On 16 January 2020, the US Senate approved the United States-Mexico-Canada Agreement (USMCA) by a vote of 89-10 following the December 2019 passage of the agreement by the US House of Representatives. The new agreement entered into force on 1 July 2020, replacing the North American Free Trade Agreement (NAFTA). The agreement continues tariff-free access for most agricultural commodities, expands market access for some additional commodities, and provides for new rules governing agricultural biotechnology and sanitary and phytosanitary measures.

The United States and the People’s Republic of China (hereafter “China”) reached a “Phase One” Trade Agreement that includes commitments by China to enact structural and economic reforms and make additional purchases of US goods and services in the coming years. The agreement also lifts or modifies import restrictions on a number of US agricultural products. The United States agreed to modify tariff actions on Section 301 as part of this agreement. The agreement was signed on 15 January 2020 and entered into force one month later.

To alleviate the impact of the COVID-19 pandemic on animal origin commodity imports, USDA’s APHIS provided flexibility by accepting electronic import documents, including veterinary certificates, regardless of the disease status of the exporting country. The provisions are set to expire on 30 June 2021.

The United States is the world’s second largest economy and the third largest country by land area and population. US GDP per capita is almost three times the average of all countries analysed in this report (Table 29.3). Primary agriculture accounts for a small part of the economy – around 0.9% of GDP and 1.5% of employment – but agro-food exports account for over 10% of total exports. The US agricultural sector benefits from a large domestic consumer market, as well as abundant arable and pasture land and diverse climatic conditions that support production of a wide range of commodities. In recent years, total agricultural production has been divided relatively equally between crops and livestock, although their shares vary over time. Key industries include grains (maize and wheat), oilseeds (soybeans), cotton, cattle, dairy, poultry, and fruits and vegetables.

The US economy contracted in 2020 and the unemployment rate increased for the first time since 2010 as a result of the COVID-19 pandemic and related restrictions (Figure 29.5). The United States is the world’s largest agricultural exporter and was a net exporter up until 2018, although the US agro-food trade surplus had narrowed in recent years (Figure 29.6). North America and developing East and Southeast Asia were the largest markets for US agricultural exports in 2019. Exports are dominated by primary products for further processing and processed products for final consumers, while half of agro-food imports are processed products for final consumption.

Total factor productivity (TFP) growth and intermediate input growth have driven agricultural output growth of 1.2% per year on average over the recent decade (Figure 29.7). TFP growth averaged 0.9% per year between 2007 and 2016, driven by farm consolidation and the adoption of innovations in crop and livestock breeding, nutrient use and pest management, farm practices, and farm equipment and structures. However, TFP growth has declined relative to the rate of growth over the period 1991-2000. The productivity growth realised by US agriculture has been achieved with an overall reduction in environmental pressures from the sector. Nutrient surplus intensities at the national level have declined and are close to the average for OECD countries (Table 29.4). Agriculture’s share in energy use is below the OECD average, as are GHG emissions. However, water stress in the United States is above the OECD average.

References

[3] Congressional Research Service (2019), “What is the Farm Bill?”, CRS Report RS22131, Congressional Research Service, https://crsreports.congress.gov/product/pdf/RS/RS22131 (accessed on 1 February 2021).

[4] Congressional Research Service (2018), Federal Crop Insurance: Program Overview for the 115th Congress, CRS Report R45193, Congressional Research Service, https://crsreports.congress.gov/product/pdf/R/R45193/4.

[1] Gray, E. and K. Baldwin (2021), “Building the resilience of the United States’ agricultural sector to extreme floods”, OECD Food, Agriculture and Fisheries Papers, No. 161, OECD Publishing, Paris, https://dx.doi.org/10.1787/edb6494b-en.

[8] OECD (2020), “United States”, in Agricultural Policy Monitoring and Evaluation 2020, OECD Publishing, Paris, https://dx.doi.org/10.1787/6f8323d8-en.

[6] OECD (2019), “United States”, in Agricultural Policy Monitoring and Evaluation 2019, OECD Publishing, Paris, https://dx.doi.org/10.1787/189dd9b6-en.

[9] OECD (2016), “United States”, in Agricultural Policy Monitoring and Evaluation 2016, OECD Publishing, Paris, https://dx.doi.org/10.1787/agr_pol-2016-27-en.

[5] OECD (2014), “United States”, in Agricultural Policy Monitoring and Evaluation 2014: OECD Countries, OECD Publishing, Paris, https://dx.doi.org/10.1787/agr_pol-2014-19-en.

[2] OECD (2011), Evaluation of Agricultural Policy Reforms in the United States, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264096721-en.

[7] USDA ERS (2020), Farm & Commodity Policy: Overview, https://www.ers.usda.gov/topics/farm-economy/farm-commodity-policy/ (accessed on 4 February 2021).

[10] USTR (2019), Fact Sheet on AgricultureRelated Provisions of the U.S.-Japan Trade Agreement, https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2019/september/fact-sheet-agriculture%E2%80%90related.

[11] WTO (2021), Tariff Profiles – United States, https://www.wto.org/english/res_e/statis_e/tariff_profiles_list_e.htm.

Notes

← 1. Federal Agriculture Improvement and Reform Act of 1996 (P.L. 104-127).

← 2. Farm Security and Rural Investment Act of 2002 (P.L. 107-171).

← 3. Food, Conservation, and Energy Act of 2008 (P.L. 110-246).

← 4. Agricultural Adjustment Act of 1938 (7 U.S.C. 1281)

← 5. Federal Crop Insurance Reform and Department of Agriculture Reorganization Act of 1994. The Food, Conservation, and Energy Act of 2008 (“2008 Farm Bill”) continued the 100% premium subsidy for CAT but increased CAT fees from USD 50 to USD 300/crop/county.

← 6. Base acres are a farm’s crop-specific historical acreage of wheat, feed grains, seed cotton, rice, oilseeds, pulse crops or peanuts eligible to participate in the ARC and PLC commodity programmes. Base acres are not linked to current plantings.

← 7. Hemp was previously uninsurable because of legal restrictions on its cultivation.

← 8. Simple average MFN applied tariff (WTO, 2021[11]).

← 9. Families First Coronavirus Response Act (FFCRA) (Public Law 116-127), enacted on 18 March 2020 and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (Public Law 116-136), enacted on 27 March 2020

← 10. The Commodity Credit Corporation (CCC) funds many of the US Department of Agriculture’s (USDA) programmes for farmers.

← 11. Section 32 is a permanent appropriation under the Agricultural Adjustment Act, as amended 24 August 1935 (P.L. 79- 320) that since 1935 has set aside the equivalent of 30% of annual customs receipts to support the US food and agriculture sector through activities to encourage consumption of US agricultural commodities. In recent years, this authority has primarily been used for purchase and distribution of commodities for use in school lunch and other nutrition programmes and for distribution to low-income households.

← 12. Pandemic EBT is modelled on the Electronic Benefits Transfer programme that utilises electronic debit cards to provide SNAP benefits to eligible recipients.

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