NASHVILLE, TN – Farm Bill safety-net payments appear more effective than some emergency programs at reducing farm loan stress, according to University of Tennessee Institute of Agriculture research examining federal payments and producer debt performance.
Researchers used Farm Service Agency payment data from 2015 through 2022 to compare Agricultural Risk Coverage and Price Loss Coverage with Market Facilitation Program and Coronavirus Food Assistance Program payments.
Agricultural Risk Coverage payments were associated with fewer short-term delinquencies of 30 to 89 days, while Price Loss Coverage reduced delinquencies lasting 90 days or more. Coronavirus assistance also reduced short-term delinquencies.
Market Facilitation Program payments showed a different result. They were associated with increased farm debt but no significant reduction in delinquency rates, suggesting those trade-relief payments provided less direct improvement in loan performance.
The findings matter as policymakers expand Farm Bill support and continue considering emergency assistance. Researchers say payment design and timing can determine whether aid improves liquidity, stabilizes debt, or simply increases producers’ borrowing capacity.
Farm-Level Takeaway: Farm Bill safety-net programs appear better at reducing loan delinquency than some ad hoc payments, making program design critical during periods of financial stress.