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January 14, 2025 - Written By Geswein Farm & Land

How the 2025 Farm Relief Act is Changing the Game for Farmers

How the 2025 Farm Relief Act is Changing the Game for Farmers

A Simple Breakdown & Insight to Maximizing Benefits

 

No AGI Limits for Farmers in the 2025 Farm Economic Relief Act

The 2025 Farm Economic Relief Act brings welcome news for U.S. farmers, offering a $10 billion aid package without the usual restrictions on Adjusted Gross Income (AGI). This move aims to provide inclusive financial assistance during challenging times in the agricultural sector.

Expanded Eligibility for All Farmers

In a departure from past programs, the new relief package removes the typical $900,000 AGI cap. This means all farmers, regardless of income, are eligible for financial support. The expanded eligibility reflects an acknowledgment of the diverse financial realities faced by farmers across the country.

Increased Payment Limits for Farmers with High Gross Revenue

The Act also includes provisions to increase payment limits for farmers whose gross revenue from farming exceeds 75% of their total gross revenue. Payment limits have been raised from $125,000 to $250,000, providing significant financial relief for larger-scale farming operations. Unlike AGI-based thresholds, this calculation focuses on gross revenue, emphasizing operational scale rather than net income.

 

What Qualifies as Farm Income?

Under Farm Service Agency (FSA) guidelines, many sources of income are considered farm income, including:

  • Revenue from the sale of crops, livestock, and milk
  • Cash rents from farmland and equipment rentals
  • Wages and dividends from farm corporations
  • Income from renewable energy projects
  • Crop insurance proceeds
  • Revenue from processing, packing, storing, or transporting farm products

However, gains from selling farm equipment or inputs only qualify as farm income if 66.66% of the farmer’s total AGI is from farming. The FSA has yet to clarify how these rules will apply under the Act’s new provisions.

Per-Acre Payment Rates by Crop

The aid package also specifies per-acre payment rates for key cash and row crops:

  • Corn: $42.51
  • Soybeans: $29.50
  • Wheat: $30.69

These rates aim to provide tailored financial support based on crop-specific challenges that farmers and landowners are facing coming out of the 2024 crop year. 2024 generally created excellent yields with low, poor, and in many cases negative ROI (return on investment).

Fast-Tracked Payments for Farmers

The USDA is required to distribute payments within 90 days of the Act’s passage. Farmers should prepare to apply by gathering necessary documentation and staying in contact with local county FSA offices for updates.

Key Takeaways

  • No AGI limits for aid eligibility, making assistance accessible to more farmers.
  • Payment limits doubled for farmers whose gross revenue from farming exceeds 75%.
  • Crop-specific payment rates to address financial challenges for diverse agricultural products.
  • Payments will be distributed within 90 days, ensuring timely support.

Supporting Farmers in Uncertain Times

The 2025 Farm Economic Relief Act underscores the federal government’s commitment to supporting the agricultural sector during challenging economic times. By removing AGI limits and broadening eligibility, this aid package represents a significant step toward strengthening the backbone of American agriculture and operators of farmland across the country.

Excerpt

The 2025 Farm Economic Relief Act provides $10 billion in financial aid for farmers, removing AGI limits and doubling payment thresholds for qualifying operations. Learn how this groundbreaking legislation supports American agriculture.