USDA could improve the efficiency and effectiveness of its farm programs.
The U.S. Department of Agriculture (USDA) administers a number of programs to support farm income, assist farmers after disasters, and conserve natural resources. USDA has also provided ad-hoc assistance to farmers who faced trade disruptions or who have lost sales due to the COVID-19 pandemic. In 2020, USDA spent about $46 billion in payments to farmers ($30 billion of which came from COVID-19 relief programs).
However, USDA could improve how it administers some of these programs.
- USDA created the Farmers to Families Food Box Program to help with the COVID-19 pandemic. Between May 2020 and May 2021, USDA purchased fresh fruits and vegetables and meat and dairy products for distribution to food banks, community and faith-based organizations, and other nonprofits. It did this to achieve 3 goals: provide food to the needy, maintain food distribution jobs, and create alternative outlets for food producers who lost customers (like restaurants). The program achieved its first goal—USDA's data shows that more than 176 million boxes were delivered to the needy. However, one lesson USDA learned during the program was that it should have been collecting data to assess the other 2 program goals. USDA could apply this lesson learned to better assess similar food programs.
- For certain farm programs that help support farmers’ income, payment recipients are required by law to be actively engaged in farming. However, USDA has had difficulty in the past verifying whether recipients were actively farming. USDA has improved its reviews since then, but some issues remain. For example, USDA waived 251 reviews that it said had been done recently and didn't need re-review yet. But there wasn’t a record of a recent review for 76 of them.
- To implement the federal crop insurance program, USDA partners with private insurance companies that sell and service policies to farmers in order to subsidize these policies. In 2010, USDA negotiated a set rate of return with these companies—that is, how much companies can profit from these insurance policies. However, this expected rate of return was too high compared with market conditions. Reducing this expected rate of return could save the federal crop insurance program hundreds of millions of dollars a year.
- Agricultural production can have harmful effects on natural resources, such as when animal waste runs off into waterways. Conservation practices (such as installing structures to store animal waste) can help mitigate these effects. USDA's Environmental Quality Incentives Program provides financial and technical help to landowners who voluntarily implement conservation practices. This program provided about $1.4 billion in payments in FY 2019. However, it could develop and use better information to more effectively target program funds.
- Draining wetlands can harm water quality and wildlife habitat. To receive certain farm program benefits, farmers must not drain wetlands on their property. USDA determines where wetlands exist on farmers’ land and checks farmers’ compliance for a random sample of land subject to this requirement. However, USDA could more efficiently ensure compliance by using a risk-based approach for its annual compliance check—i.e., checking land most likely to have violations rather than a random sample of land.
Wetland "Potholes" and Farm Land in North Dakota