Direct: The govt made some formula, based on past programs, current needs, etc. and came up with a per-acre dollar amount they will hand you based on crop history you grew on your farm some time ago.
This money is basically figured into land costs - it is 'part of' the rent you pay or the price for land you buy. Without this program, land prices would be lower, land taxes would be lower.
Yup, the money is given to the farmer, but it really actually gets 'given' to the land owner one way or another.
Personally, I feel this is the stupidist farm program. Wouldn't break my heart if they did away with this portion of it. No farmer gains much from it, even if it looks like a check to you....
Counter cyclical: This is a 'long term' version of the LDP program. LDP is picking a certain day to lock in LDP payment, if there is any.
CC payment uses the whole year average grain price, and pays you a subsidy for the grain you raised if the average price for the whole year fell below target prices. This is probably the most sensible program - a real safety net of keeping farmers afloat if the bottom falls out of grain markets.
My personal view is that conter-cyclical has rarely kicked in, but it does the job of putting a safety net out there.
LDP is a rather odd program, but it also puts in a safety net when times are really, really bad - like the govt ticks off another country & our ag markets get clobbered by those actions. Without this, the CC program would likely need to be bigger. That would be ok tho.
The direct payment is worthless - mind you have to take the checks when offered, everyone else does and you'd be left out, but that whole portion could go away & I would say good thing, we'd all be on equal footing still. Farm land would go down a little in value, hurt a few retired folks. I kind think the direct payment is to get us all to fall into line & play nice with the govt, do the programs, etc., so they can keep track of things. Not black helicopter thoughts, just basic keep tabs of an industry stuff.
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