U.S. Farm Support: Outlook for Compliance with WTO Commitments, 2018 to 2020

October 21, 2020 R46577

U.S. Farm Support: Outlook for Compliance
October 21, 2020
with WTO Commitments, 2018 to 2020
Randy Schnepf
U.S. outlays for market-distorting domestic farm support could exceed the annual U.S. spending
Specialist in Agricultural
limit of $19.1 billion in both 2019 and 2020. As a member of the World Trade Organization
Policy
(WTO) agreements, the United States has committed to abide by WTO rules and disciplines,

including those that govern domestic farm policy as spelled out in the Agreement on Agriculture
(AoA). The United States agreed to the annual spending limit as part of its commitments to other

WTO members. Since establishment of the WTO on January 1, 1995, the United States has
complied with its WTO spending limits on market-distorting types of farm program outlays (referred to as amber box
spending). However, since 2018, the U.S. Department of Agriculture (USDA) has initiated several large ad hoc spending
programs—valued at up to $60.4 billion—in response to international trade retaliation in 2018 and 2019, and to economic
disruption caused by the coronavirus disease pandemic in 2020. The combination of ad hoc payment programs and existing
farm program support could push domestic farm support outlays above the U.S.’s own commitment to the World Trade
Organization and its members.
Compliance with WTO commitments is based on aggregate
U.S. Compliance with WTO Spending Limit
spending levels for each crop year. The United States
Actual Notifications for 1995-2017; CRS Projections for 2018-2020
committed to limiting U.S. amber box outlays (i.e., those
outlays deemed market distorting) to $19.1 billion
annually; de minimis exemptions may reduce the
calculation of amber box outlays. Under de minimis
exemptions, if domestic support is sufficiently small it may
be deemed benign and excluded from counting against the
amber box spending limit. Two de minimis exemptions are
available: product-specific—if aggregate domestic support
for a specific commodity is less than 5% of its value; and
non-product-specific—if total domestic support on general
programs (not associated with specific commodities) is less
than 5% of the value of total agricultural output. Between
1995 and 2017, the United States has stayed within its
amber box limits. However, U.S. compliance relied on the
use of the de minimis exemptions in a number of years to
exclude certain farm support payments from counting
against the amber box limit.

Source: Data for 1995-2017 are from official USDA notifications
CRS has evaluated the potential compliance status for U.S.
to the WTO. Data for 2018-2020 are compiled by CRS from
domestic spending for each of 2018, 2019, and 2020, based
USDA spending projections supplemented by other sources cited
on available program data through mid-2020 from USDA’s
in the text and based on historic notification and exemption trends.
Farm Service Agency, supplemented by forecasts of final
Notes: The two de minimis exemptions are: PS=product specific;
2020 USDA outlays by USDA’s Economic Research
and NPS=non-product-specific.
Service and the Food and Policy Research Institute
(FAPRI) of the University of Missouri. In addition to outlays under traditional farm support programs, this evaluation
includes spending data and forecast outlays under the 2018 and 2019 Market Facilitation Programs (MFPs) and the two 2020
Coronavirus Food Assistance Programs (CFAP-1 and CFAP-2). The evaluation also includes potential spending on farm
support from the Small Business Administration’s Paycheck Protection Program (PPP). USDA has not notified the WTO of
its domestic support spending for 2018, 2019, or 2020, nor has it indicated how it will classify outlays under these new ad
hoc spending programs. As a result, CRS relies on precedent of how similar program spending has been classified and
notified to the WTO in the past.
If the United States were to exceed its WTO annual spending limit, then offending farm programs (whether ad hoc or
traditional) could be vulnerable to challenge by another WTO member under the WTO’s dispute settlement rules. However,
if the payment programs that appear likely to cause the United States to exceed its WTO spending limits in 2019 and 2020
prove to be temporary, then a successful WTO challenge might not necessarily result in an adverse ruling against the United
States or any other authorized retaliation (e.g., permission to rais e tariffs on U.S. products), depending on the outcome of a
WTO dispute settlement proceeding.
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U.S. Farm Support: Outlook for Compliance with WTO Commitments, 2018 to 2020

Introduction
The long-term objective of the World Trade Organization’s (WTO’s) Agreement on Agriculture
(AoA) is to establish a fair and market-oriented agricultural trading system.1 The principal
approaches for achieving this goal are, first, to achieve specific binding commitments by al WTO
members in each of the three pil ars of agricultural trade policy reform—market access, domestic
support, and export subsidies—and second, to provide for substantial progressive reductions in
domestic agricultural support and border protection from foreign products.
As a signatory member of the WTO agreements, the United States has committed to abide by
WTO rules and disciplines, including those that govern domestic farm policy as defined in the
AoA.2 Since the WTO was established on January 1, 1995, the United States has general y met its
WTO commitments with respect to al owable spending on market-distorting types of farm
program outlays.
What Is the Issue?
The U.S. government provided up to $60.4 bil ion in ad hoc payments to agricultural producers
cumulatively in 2018, 2019, and 2020, in addition to existing farm support. These payments have
raised concerns among some U.S. trading partners, as wel as market watchers and policymakers,
that U.S. domestic farm subsidy outlays might exceed its annual WTO spending limit of $19.1
bil ion in one or more of those three years.3
Compliance with WTO commitments is based on the total spending under al U.S. farm support
programs for each crop year, but subject to certain exemptions (described below). From 1995
through 2017, the United States has met its WTO commitments; however, this compliance has
relied on use of the available exemptions in several years to exclude certain domestic support
spending from counting against the spending limit.
The United States notified an average of $15.4 bil ion in annual domestic farm support (prior to
exemptions)—or cumulatively, $46.1 bil ion—during the recent three-year period from 2015 to
2017.4 New spending of up to $60.4 bil ion under U.S. government ad hoc payment programs—
that the United States may have to report, and which would be in addition to the traditional farm
support programs—could more than double the amount of annual domestic support subject to the
spending limit in 2018 through 2020. This new ad hoc spending includes the 2018 Market
Facilitation Program (MFP), valued at $8.6 bil ion; the 2019 MFP, valued at $14.5 bil ion; the
two 2020 Coronavirus Food Assistance Programs (CFAP-1 and CFAP-2), valued at up to $16.0
bil ion and up to $14.0 bil ion, respectively; and the 2020 Paycheck Protection Program’s (PPP’s)
forgivable loans to agricultural interests, valued at $7.3 bil ion.5

1 T he WT O is a global rules-based, member-driven organization dealing with the rules of trade between nations. As of
July 29, 2016, the WT O included 164 members. See CRS Report R45417, World Trade Organization: Overview and
Future Direction.
2 For an overview, see CRS Report R45305, Agriculture in the WTO: Rules and Limits on U.S. Domestic Support.
3 For a description of traditional farm support programs, see CRS Report R45730, Farm Commodity Provisions in the
2018 Farm Bill (P.L. 115-334).
4 2017 is the last year for which the United States has made an official notification to the WT O of its domestic support
outlays, by program and by commodity, and their compliance with WT O rules. Funding in nominal dollars.
5 Outlays under the CFAP-1 and CFAP-2 are not finalized, but are expected to be less than the available funding levels
(actual outlays are estimated at $11 billion and $13.3 billion, respectively, as discussed in this report). Recipients of
PPP loans must meet certain criteria to qualify for “loan forgiveness.” USDA anticipates that $5.8 billion out of $7.3
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U.S. Farm Support: Outlook for Compliance with WTO Commitments, 2018 to 2020

CRS analysis (described in this report and based on available data) indicates that U.S. domestic
farm support outlays were likely within the agreed-to WTO spending limit of $19.1 bil ion in
2018, but could exceed the limit in 2019 depending on the U.S. Department of Agriculture’s
(USDA’s) notification strategy. In 2020, U.S. non-exempt domestic support outlays appear likely
to surpass the spending limit if a typical notification strategy is used by USDA.
Report Objectives
This report examines whether the United States might exceed its WTO spending limit during any
of the three years from 2018 through 2020. As background, this report briefly reviews the WTO
rules and disciplines on farm program spending.6 Then, it reviews the types of U.S. farm
programs that are subject to WTO disciplines—in particular, it focuses on programs that make
direct payments to agricultural producers. The review of farm programs includes a discussion of
how U.S. compliance may be affected by the large ad hoc direct payment programs initiated by
the Secretary of Agriculture during 2018 through 2020, and other spending on farm support
authorized by Congress in response to the COVID-19 pandemic.
The nature and timing of U.S. farm support program outlays are discussed in the context of
relevant WTO commitments—in particular, how different types of program outlays are notified to
the WTO and how they might count against the aggregate U.S. spending limit. Final y, this report
examines current projections about farm program outlays for 2018 through 2020, and assesses the
possibility of whether U.S. farm program spending might exceed the $19.1 bil ion spending limit
in those years.
The United States has notified its domestic support outlays through the 2017 crop year.7 Projected
outlays for 2018 through 2020 are based on available data on program spending through mid-
2020 from USDA’s Farm Service Agency (FSA), supplemented by forecasts of final 2020 USDA
program outlays by USDA’s Economic Research Service (ERS) and the University of Missouri’s
Food and Policy Research Institute (FAPRI) (as described later in the report). The as-yet-to-be-
notified program spending for 2018 through 2020 is classified under the various WTO spending
categories based on the assumption that USDA wil notify similar new program outlays in
accordance with historical precedent. Available WTO exemptions are then applied to the program
outlays so as to minimize the aggregate outlays that count against the spending limit. Final y, the
compliance status for U.S. domestic spending is made by comparing the remaining, non-exempt
aggregate program spending for each crop year, 2018 through 2020, to the $19.1 bil ion spending
limit.
WTO Disciplines on Farm Program Spending
Farm support programs can violate WTO commitments in two principal ways: first, by exceeding
spending limits on certain market-distorting programs, or second, by generating market
distortions in the international marketplace and causing significant adverse effects for other
market participants. A full treatment of the compliance of U.S. farm support outlays with WTO

billion (79.5%) of PPP loans to agricultural interests will be forgiven. USDA has not yet notified domestic support
spending for 2018-2020, nor has it indicated how it will classify outlays under these new ad hoc spending programs.
T hese classifications can be critical to determining compliance with the spending limit, as discussed later in this report.
6 For details, see CRS Report R45305, Agriculture in the WTO: Rules and Limits on U.S. Domestic Support.
7 WT O, “U.S. Notification of Domestic Support for Marketing Year 2017,” G/AG/N/USA/135, July 24, 2020.
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commitment would evaluate both of these criteria. This report focuses on the first potential
pathway for a violation: spending exceeding the U.S. limit.8
WTO member nations have agreed to limit spending on their most market-distorting farm
policies. The WTO’s AoA spel s out the rules for countries to determine whether their policies are
potential y trade-distorting, how to calculate the costs of any distortion, and how to report those
costs to the WTO in a public and transparent manner. (See the text box “WTO Classification of
Domestic Support” below.) To provide for monitoring and compliance of WTO policy
commitments, each WTO member is expected to submit annual notification reports of domestic
support program spending within the context of the agreed-to WTO commitments.9
Domestic farm subsidies under the AoA are measured in monetary terms using a special y defined
indicator, the “Aggregate Measurement of Support” (AMS). AMS encompasses two types of
support provided as a benefit to agricultural producers: product-specific support (i.e., benefits
linked to a specific commodity) and non-product-specific support (general benefits not linked to a
specific commodity). This distinction is important for evaluating compliance and exemptions.
The United States, along with 27 other original members of the WTO, agreed to establish ceilings
for their non-exempt AMS—also referred to as the amber box spending (exemptions are
described below). The U.S. ceiling for amber box spending has been fixed at $19.1 bil ion since
2000. If the United States were to exceed this limit, then U.S. farm support programs could be
vulnerable to chal enge by another WTO member under the WTO’s dispute settlement rules.
Some Program Spending May Be Exempt from Disciplines
Not al farm support program outlays count against amber box spending limits. Some types of
programs deemed to be non- or minimal y-market distorting (such as food assistance and
conservation programs) are designated as green box, and thus are not included as part of the
AMS.10 Outlays for other programs may be excluded from the AMS calculation if they comply
with production-limiting criteria defined under the blue box. Final y, some domestic support
spending that is part of the AMS may be exempt from counting against any WTO spending limit
if the sum is sufficiently smal as to be deemed benign under the de minimis exemption. These
exemptions are described below.
WTO Classification of Domestic Farm Support Payments
The WTO classifies program spending according to the degree of market distortion.
Aggregate Measurement of Support (AMS) sums in monetary terms the market-distorting program outlays.
AMS encompasses two types of support provided as a benefit to agricultural producers: product -specific support
(i.e., benefits linked to a specific commodity) and non-product-specific support (general benefits not linked to a
specific commodity). Certain program spending may be excluded from the AMS by green or blue box criteria (see
below). AMS outlays may also be eligible for exemption from counting against spending limits if they are below
product- or non-product-specific de minimis 5% spending thresholds (see below).
 Amber box outlays are non-exempt AMS (i.e., AMS after accounting for permissible exemptions). Amber box
outlays are subject to aggregate annual spending limits. The United States has committed to a spending limit of
$19.1 bil ion for amber box outlays. In its 2017 notification—its most recent (see Table 3 at the end of this
report), the United States declared $12.9 bil ion of AMS outlays prior to exemptions, of which only $4.2 bil ion
counted against the amber box spending limit due to de minimis exemptions (see below).

8 For a discussion of the second pathway—market distortions—see CRS Report RS22522, Potential Challenges to U.S.
Farm Subsidies in the WTO: A Brief Overview.
9 WT O, AoA, Article 18, “Review of the Implementation of Commitments.”
10 Green box programs are defined by Annex II of the AoA.
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 Green box programs are minimal y or non-trade distorting and are not subject to any spending limits. In its 2017
notification, the United States declared $118.2 bil ion in green box outlays, including $99.6 bil ion in domestic food
assistance programs.
 Blue box programs are described as market-distorting but production-limiting. Payments are based on either a
fixed area or yield or a fixed number of livestock, and are made on less than 85% of base production. As such,
blue box programs are not subject to spending limits. The United States presently has no blue box programs.
 De minimis exemptions are spending that is sufficiently smal (less than 5% of the value of production)—relative
to either the value of a specific product or total production—to be deemed benign and, thus, excluded from
counting against the amber box limit. In it 2017 notification, the United States declared a total of $8.7 bil ion in de
minimis exemptions, including $5.2 bil ion in product-specific and $3.4 bil ion in non-product-specific exemptions.
Program Design—Whether PS or NPS—Is Critical
It is critical to distinguish between product-specific (PS) and non-product-specific (NPS) support
under the WTO categorization of domestic support.11 PS and NPS outlays are subject to different
potential de minimis exemptions when calculating the total amber box outlay. PS outlays are
evaluated at the individual product level separately for each commodity, whereas NPS outlays are
evaluated at the national level across al commodities simultaneously.
For example, suppose that U.S. farm subsidy payments to corn producers were $2.5 bil ion in a
year, but that the value of total U.S. corn production was $60 bil ion that same year. Then the PS
de minimis threshold for corn would be $3 bil ion (i.e., $60 bil ion x 5%), and the $2.5 bil ion in
corn subsidies would be excluded from the AMS calculation for that year.
Similarly, suppose that total NPS support for a year—including outlays under the Agricultural
Risk Coverage (ARC), Price Loss Coverage (PLC), and other NPS programs—was $19 bil ion.12
If the total value of U.S. agricultural output, across al of the various field and specialty crops and
livestock activities, was at least $380 bil ion, then the entire NPS subsidy value would be
excluded because it would not exceed the NPS de minimis limit of $19 bil ion (i.e., $380 bil ion x
5%).
If PS or NPS domestic support outlays exceed their de minimis thresholds by as much as a dollar,
then the entire outlay is included as part of the amber box total that counts against the spending
limit. From 1995 through 2017, the United States has met its WTO commitments; however, this
compliance has hinged on judicious use of the available PS and NPS de minimis exemptions in a
number of years—including 1999, 2000, and 2001 (Figure 1)—to exclude certain domestic
support spending from counting against the spending limit.
U.S. Farm Support Programs
USDA farm programs with direct payments can be divided into two categories based on their
underlying authority: (1) traditional farm support programs that are authorized under periodic
omnibus legislation known as a “farm bil ,”13 and (2) ad hoc programs initiated or authorized
outside of traditional omnibus farm legislation. Farm payment programs, separated into these two

11 For a detailed description of PS and NPS categorization of U.S. farm programs, see CRS Report R45940, U.S. Farm
Support: Com pliance with WTO Com m itm ents.
12 ARC and PLC programs are notified as NPS since payments are made to historical base acres rathe r than to current
planted acres (i.e., current crop choices); thus the producer does not need to plant the commodity to receive a payment
under the program. For details, see CRS Report R45940, U.S. Farm Support: Com pliance with WTO Com m itm ents.
13 See CRS In Focus IF11126, 2018 Farm Bill Primer: What Is the Farm Bill?
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categories, are briefly described in terms of the expected payment amounts, the timing of
payments, and whether the payments are likely to be notified by USDA as either product-specific
(PS) or non-product-specific (NPS).
Traditional Farm Support Programs
Title I of the 2018 farm bil (P.L. 115-334) authorizes the current suite of farm support
programs.14
 Farm revenue support programs include the Market Assistance Loan (MAL),
Agricultural Risk Coverage (ARC), Price Loss Coverage (PLC), Dairy Margin
Coverage (DMC), and sugar programs. Payments under these programs during
crop years 2014-2018 were authorized by the 2014 farm bil (P.L. 113-79).15
These programs were modified by the 2018 farm bil and include payments for
crop years 2019-2023. Because of the way the payments are triggered, outlays
under the MAL, DMC, and sugar programs are coupled to producer choices and
are notified as product-specific AMS.16 In contrast, ARC and PLC payments are
decoupled from producer crop choices and are notified as non-product-specific
AMS.17
 Permanent disaster assistance programs include the Livestock Forage Disaster
Program (LFP), Livestock Indemnity Program (LIP), Tree Assistance Program
(TAP), and Emergency Assistance for Livestock, Honeybees, and Farm-Raised
Fish Program (ELAP).18 Payments under al of these permanent disaster
assistance programs are coupled to producer choices and notified as product-
specific AMS.
 The federal crop insurance program provides premium subsidies to
producers.19 Premium subsidies are statutorily defined as a percentage of a
policy’s total premium, and premiums vary with insured units, coverage levels,
and crop values. Since 2012, USDA has notified crop insurance premium
subsidies to the WTO as product-specific AMS for the majority of policies sold,

14 In 2018, the United States enacted P.L. 115-334, the five-year omnibus 2018 farm bill. It covers a broad range of
agriculture-related program areas in 12 separate titles. T he first title, Commodities, authorizes the farm programs that
make direct payment s to eligible producers and are notified as AMS—including the revenue support programs for
major program crops. See CRS Report R45730, Farm Com m odity Provisions in the 2018 Farm Bill (P.L. 115 -334).
Outlays under these commodity programs have been notified by USDA to the WT O for the years 2014 through 2017,
thus their WT O classifications are already well established.
15 T he DMC was created under the 2018 farm bill, and is a modification of the Margin Payment Program created under
the 2014 farm bill.
16 Coupled means that payments are linked to current producer behavior. In contrast, decoupled payments are not
linked to producer behavior but are instead based on some other measure outside of the producer’s decision making
sphere, such as historical acres planted to program crops. Coupled payments have the most distortive influence on
producer behavior. Decoupling of payments is intended to minimize their incentives on producer behavior.
17 For a discussion of ARC and PLC classification under WT O AMS categories, see CRS Report R45940, U.S. Farm
Support: Com pliance with WTO Com m itm ents.
18 LFP, LIP, T AP, and ELAP are permanently authorized by the 2014 farm bill. See CRS Report RS21212,
Agricultural Disaster Assistance.
19 Federal crop insurance is permanently authorized by the Federal Crop Insurance Act of 1980 as amended (7 U.S.C.
§1501 et seq.). See CRS Report R45193, Federal Crop Insurance: Program Overview for the 115th Congress.
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since they are coupled directly to producer crop choices.20 Only whole farm
revenue insurance is notified as non-product specific support.
Ad Hoc Farm Support Programs
U.S. agriculture has benefited from five major ad hoc payment programs since 2018 that include
both PS and NPS payment components. Four of these programs (the 2018 and 2019 Market
Facilitation Programs (MFPs), and the first and second rounds of the 2020 Coronavirus Food
Assistance Program (CFAP-1 and CFAP-2) have been initiated by USDA under authorities
outside of major omnibus farm legislation, while a fifth program (the Smal Business
Administration’s Paycheck Protection Program) was authorized under non-farm bil legislation
(the Coronavirus Aid, Relief, and Economic Security Act or CARES Act; P.L. 116-136). Each of
these ad hoc programs is briefly summarized:
 the 2018 MFP made $8.6 bil ion in product-specific payments on nine
commodities including 7 crops (corn, cotton, sorghum, soybeans, wheat, fresh
sweet cherries, and shel ed almonds) harvested in 2018, on hog inventories from
mid-2018, and on historical milk production;21
 the 2019 MFP made $14.5 bil ion in payments, including $12.8 bil ion in non-
product-specific support based on a single-weighted-county payment rate for 29
field crops22 and a single-weighted-payment rate for 6 tree nuts (almonds,
hazelnuts, macadamia nuts, pecans, pistachios, and walnuts) harvested in 2019;
and $1.7 bil ion in product-specific payments based on 6 commodities including
cranberries, ginseng, fresh sweet cherries, and table grapes harvested in 2019, on
hog inventories from mid-2019, and on historical milk production;23
 the 2020 CFAP-1 is expected to make payments of $11.0 bil ion,24 including $4.0
bil ion in product-specific payments on 138 different commodities based on on-
farm inventories from the 2019 harvest (assigned to crop year 2019), and $7.0
bil ion in product-specific payments to unsold inventories in 2020 of livestock
(cattle, hogs, lamb, and sheep) and dairy (assigned to crop year 2020);25
 the 2020 CFAP-2 is expected to make up to $14.0 bil ion in product-specific
payments on an expanded list (of at least 150 commodities) of 2020 crop and
livestock products (assigned to crop year 2020);26 and

20 Prior to 2012, crop insurance outlays were notified as “net indemnities” that comprised total indemnity payments
minus the producer-paid share of premiums. T hese net indemnities were classified as NPS AMS outlays and excluded
from counting against the amber box spending limit under the NPS de minimis exemption.
21 Payments are as of September 18, 2020; CRS Report R45310, Farm Policy: USDA’s 2018 Trade Aid Package.
22 Alfalfa hay, barley, canola, corn, crambe, dried beans, dry peas, extra-long-staple cotton, flaxseed, lentils, long- and
medium-grain rice, millet, mustard seed, oats, peanuts, rapeseed, rye, safflower, sesame seed, small and large
chickpeas, sorghum, soybeans, sunflower seed, temperate japonica rice, triticale, upland cotton, and wheat.
23 See CRS Report R45865, Farm Policy: USDA’s 2019 Trade Aid Package.
24 CFAP-1 was funded at up to $16 billion; however, as of September 24, 2020, only $10.3 billion had been disbursed.
Since sign-up for CFAP -1 closed on September 11, 2020. FAPRI (#05-20, September 2020) projects that final
payments will be $11 billion. CRS has adopted the FAPRI projection of $11 billion.
25 See CRS Report R46395, USDA’s Coronavirus Food Assistance Program (CFAP) Direct Payments.
26 USDA projects outlays of $13.3 billion after adjusting for expected participation and payment limits; USDA,
“Coronavirus Food Assistance Program 2, Cost -Benefit Analysis,” September 18, 2020; and USDA, “Coronavirus
Food Assistance Program, Final Rule” Federal Register, Vol. 85, No. 184, September 22, 2020, p. 59380;
https://www.farmers.gov/cfap.
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 the 2020 Paycheck Protection Program’s (PPP’s) forgivable loans to
agricultural interests valued at $7.3 bil ion include $3.6 bil ion to product-
specific production activities and $3.7 bil ion to non-product-specific activities
(assigned to crop year 2020).27
In addition to direct producer payments, both the 2018 and 2019 MFPs included two additional
components—the Food Purchase and Distribution Program (FPDP) and the Agricultural Trade
Promotion (ATP) program. The FPDP was valued at $1.2 bil ion under the 2018 MFP and $1.4
bil ion under the 2019 MFP, while the ATP was valued at $0.2 and $0.1 bil ion, respectively.
USDA food purchase and distribution programs have historical y been notified to the WTO as
green-box-compliant and thus not subject to any spending limit. Trade promotion programs, such
as ATP, are not notified under domestic support because they do not involve direct payments to
producers. Thus, the FPDP and ATP programs are not included in the AMS calculations presented
in this report.
The two Coronavirus Food Assistance Programs also included food purchase and distribution
programs known as the “Farmers to Families Food Box” programs. As with the FPDP program
under MFP, the Food Box program is excluded from the AMS calculations in this report.
U.S. Farm Program Spending, 2015-2020
The United States has notified its domestic support spending to the WTO for crop years 1995
through 2017.28 A summary of the 2017 notification is included in Table 3 at the end of this
report. Precedent serves as a guide for projecting and classifying major U.S. program outlays for
the years 2018-2020 (Table 1 and Table 2).
Program outlays for the 2018 and 2019 marketing year are largely finalized. For the 2020
marketing year, crop production has not yet been finalized (this is not expected until January
2021 at the earliest) and outlays for several programs—particularly ARC and PLC—have yet to
be calculated and announced (this is expected in September 2021). As a result, final outlays for
2020 are stil subject to changes in market conditions.29
Historical y, the two largest U.S. farm spending categories are federal crop insurance premium
subsidies, which averaged about $6 bil ion per year during 2015-2017,30 and combined payments
under the ARC and PLC revenue support programs, which also averaged about $6 bil ion per year

27 T he CARES Act created both the Small Business Administration’s PPP and the Emergency Economic Injury
Disaster Loan (EIDL) grants to provide short -term, economic relief to certain small businesses and nonprofits. Data for
EIDL grants to agricultural operations have not been analyzed and are not included in this analysis. See CRS Insight
IN11357, COVID-19-Related Loan Assistance for Agricultural Enterprises. USDA’s ERS farm income forecast for
2020 assumes that $5.8 billion in PPP loans (79.5%) are forgiven and thus counted as farm income in 2020 out of a
total of $7.3 billion in agriculture-related PPP loans. T he 79.5% share is applied to both the PS ($3.6 billion) and NPS
($3.7 billion) components of PPP loans to obtain estimates of $2.9 billion each of PS and NPS non -exempt outlays.
28 2017 is the most recent U.S. notification of domestic farm support; WTO, “U.S. Notification of Domestic Support
for Marketing Year 2017,” G/AG/N/USA/135, July 24, 2020.
29 T he crop-year forecasts for 2020 outlays are compiled by CRS using calendar-year estimates for 2020 from USDA’s
ERS, and for 2021 from FAPRI (#05-20, September 2020).
30 See CRS Report R45193, Federal Crop Insurance: Program Overview for the 115th Congress.
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during 2015-2017 (Table 1).31 Another large program outlay notified to the WTO is annual sugar
price support of about $1.5 bil ion.32
The five ad hoc programs (2018 MFP, 2019 MFP, CFAP-1, CFAP-2, and PPP) are forecast to
amount to an additional $53.2 bil ion in payments beyond the traditional farm programs and crop
insurance premium subsidies—including $8.6 bil ion in crop year 2018, $18.5 bil ion in 2019,
and $26.1 bil ion in 2020.33
The ad hoc outlays include both product-specific and non-product-specific payments. As a result
of these ad hoc payments, the pre-exemption AMS for the United States is forecast to jump from
its 2015-2017 average of $15.4 bil ion to $22.5 bil ion in 2018, $33.9 bil ion in 2019, and $42.0
bil ion in 2020. Previously, the largest pre-exemption AMS total for the United States was $24.3
bil ion in 2000.
Table 1. U.S. Domestic Support by Major AMS Category: Actual and Projected
Actual (2015-2017) and Projected (2018-2020); $ Bil ions
Actual
CRS Projections
WTO classification
2015
2016
2017

2018
2019
2020
AMS (prior to exemptions)
17.2
16.0
12.9

22.5
33.9
42.0
Product-Specific (PS)
9.0
8.6
9.5

19.5
15.1
31.6
Sugar price support
1.5
1.5
1.5

1.5
1.5
1.5
FCIC premium subsidiesa
6.1
5.8
6.1

6.3
6.4
6.4

2018 MFPb
—
—
—

8.6
—
—
2019 MFPc
—
—
—

—
1.7
—
CFAP-1d
—
—
—

—
4.0
7.0
CFAP-2e
—
—
—

—
—
13.3
PPP (PS portion)f
—
—
—

—
—
2.9
Other PS outlaysg
1.4
1.3
1.8

3.1
1.5
0.6
Non-Product-Specific (NPS)
8.2
7.4
3.4

2.9
18.7
10.4
ARC/PLCh
7.9
7.1
3.1

2.6
5.8
7.1
2019 MFPi
—
—
—

—
12.8
—
PPP (NPS portion)j
—
—
—

—
—
2.9
Other NPS outlaysk
0.3
0.3
0.3

0.3
0.3
0.3
Source: Data for 2015-2017 are from U.S. notifications to the WTO. Data for 2018 through 2020 are CRS
forecasts based on data from several sources, including USDA, ERS, Farm Income Database, as of September 2,

31 See CRS In Focus IF11161, 2018 Farm Bill Primer: ARC and PLC Support Programs.
32 T he U.S. sugar program provides indirect price support —no direct payments are actually made. T he $1.5 billion
annual outlay notified by USDA to the WT O is an estimate of the sugar price protection provided by the system of
tariff-rate quotas that limit access by foreign sugar to the U.S. market.
33 T he projected outlays under CFAP -1 ($11 billion) and CFAP-2 ($13.3 billion) have been adjusted for expected
participation rates and payment limits, while the PPP was lowered to reflect USDA’s expectation about the share of
forgiven loans, as discussed in Table 1. As a result, the announced aggregate funding level of $60.4 billion, based on
total funding availability, is reduced to $54.7 billion after adjustments.
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U.S. Farm Support: Outlook for Compliance with WTO Commitments, 2018 to 2020

2020; and FAPRI, Baseline Update for U.S. Farm Income and the Farm Balance Sheet, University of Missouri, Report
#05-20, September 2020. Federal crop insurance premium subsidies are from USDA’s Risk Management
Agency’s Summary of Business database (as of September 21, 2020). Al data are adjusted by CRS to a crop-year
basis and reflect USDA’s announced payments under ARC and PLC (as of March 12, 2020). 2020 crop-year
forecasts of ARC and PLC outlays are compiled by CRS using calendar-year estimates for 2020 from USDA’s
ERS, and for 2021 from FAPRI (#05-20, September 2020). USDA’s Farm Service Agency provides data for 2018
MFP (as of September 18, 2020), and 2019 MFP (as of September 28, 2020). Commodity-specific CFAP-1 outlays
are from USDA (https://www.farmers.gov/cfap1/data). CFAP-2 payments are estimates from USDA, “CFAP-2
Cost Benefit Analysis,” September 15, 2020.
Notes: AMS=Aggregate Measurement of Support; WTO=World Trade Organization; FCIC=Federal Crop
Insurance Corporation; ARC=Acreage Risk Coverage; PLC=Price Loss Coverage; MFP=Market Facilitation
Program; CFAP=Coronavirus Food Assistance Program; PPP=Paycheck Protection Program. Official USDA
domestic support outlays and their WTO classification for 2018-2020 wil not be known until USDA makes an
official notification for those years to the WTO. The data presented in this table are an approximation based on
crop prices, harvested values, and market conditions as of September 11, 2020. As market conditions change and
new payment data become available, these forecasts can be expected to change. Totals may not add up due to
rounding.
a. For details, see CRS In Focus IF10980, Farm Bil Primer: Federal Crop Insurance.
b. The 2018 MFP made commodity-specific payments on crops harvested in 2018, on hog inventories in mid-
2018, and on historical milk production. See CRS Report R45310, Farm Policy: USDA’s 2018 Trade Aid
Package. 2018 MFP payment data are from USDA, FSA, September 18, 2020.
c. The 2019 MFP made commodity-specific payments (i.e., PS outlays) for dairy, hogs, cranberries, ginseng,
sweet cherries (fresh) and table grapes of approximately $1.7 bil ion. Payments to non-specialty crops,
estimated at $12.8 bil ion, were based on non-commodity-specific, weighted county-level payment rates
(i.e., NPS outlays). See table note for NPS 2019 MFP below for a description. 2019 MFP payment estimates
are from USDA, Office of the Chief Economist, “Trade Damage Estimation for the 2019 Market Facilitation
Program and Food Purchase and Distribution Program,” August 22, 2019
d. CFAP-1 outlays of $11 bil ion, out of a potential $16 bil ion, are from FAPRI (#05-20, September 2020) and
reflect lower-than-expected participation rates as evidenced by the announced outlays of $10.3 bil ion as of
October 18, 2020 (five weeks after program signup had closed on September 11, 2020). CFAP-1 payments
assigned to 2019 involved payments based on crops harvested in 2019 (or earlier) and stil held in on-farm
inventories during the January to April period of 2020. CFAP-1 payments assigned to 2020 involved
payments to on-farm livestock and products during the January-to-April period of 2020 (i.e., animals, milk,
or wool expected to be marketed in 2020). For details on the CFAP-1 payment formulation, see CRS
Report R46395, USDA’s Coronavirus Food Assistance Program (CFAP) Direct Payments.
e. Announced by USDA on September 18, 2020, CFAP-2 payments target 2020 crop and livestock production
that is expected to be marketed during the second, third, and fourth quarters of 2020. The CFAP-2
payment data used in the table include adjustments to final outlays based on expected participation and
payment limitations incurred by several large farm operations from USDA, “Coronavirus Food Assistance
Program 2, Cost-Benefit Analysis,” September 15, 2020. As a result of the adjustments, CFAP-2 outlays use
$13.3 bil ion of the potential of $14 bil ion made available for the program.
f.
PPP involves forgivable loans to various smal business operators including $7.3 bil ion to agricultural
businesses. Loan recipients are expected to meet certain program criteria in order to qualify for loan
forgiveness. USDA’s ERS, in its farm income forecasts for 2020, forecast that $5.8 bil ion (79.5%) of PPP
loans would be forgiven and count as direct payments to producers. However, no detail was provided on
which loans would be forgiven. CRS subdivided PPP agricultural loans into loans that focus on production of
specific commodities (i.e., PS) and loans that are more general in nature (i.e., NPS)—this produced
estimates of $3.6 bil ion in PS and $3.7 bil ion in NPS loans. Then CRS assumed that 79.5% of loans in each
category would be forgiven. This produced forecasts of $2.9 bil ion in forgiven PPP loans for both PS and
NPS categories.
g. Other PS outlays include payments under the Dairy Margin Coverage (DMC) and the Margin Protection
Program (MPP), marketing assistance loan benefits, cotton user assistance, cotton ginning cost share,
disaster assistance including Wildfire and Hurricanes Indemnity Payments, and other programs.
h. For a description of the ARC and PLC programs, see CRS Report R45730, Farm Commodity Provisions in the
2018 Farm Bil (P.L. 115-334).
i.
The MFP payment formula for 2019 was modified for non-specialty crops to be a single county payment
rate rather than the commodity-specific rates that were applied in 2018. Eligible non-specialty crops
included alfalfa hay, barley, canola, corn, crambe, dried beans, dry peas, extra-long-staple cotton, flaxseed,
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lentils, long- and medium-grain rice, mil et, mustard seed, oats, peanuts, rapeseed, rye, safflower, sesame
seed, smal and large chickpeas, sorghum, soybeans, sunflower seed, temperate japonica rice, triticale,
upland cotton, and wheat. Tree nuts were also combined into a single per-acre payment rate and are
treated as NPS outlays. See CRS Report R45865, Farm Policy: USDA’s 2019 Trade Aid Package.
j.
See previous comment for PPP (PS portion) above.
k. Other NPS outlays include irrigation, grazing, and storage subsidies, as wel as FCIC premium subsidies for
Whole-Farm Revenue Crop Insurance.
Evaluating U.S. Compliance with Spending Limits
Several important factors pertain when evaluating whether U.S. domestic support wil be in
compliance with U.S. WTO commitments during the crop years of 2018 through 2020. While
program outlays for the 2018 and 2019 marketing year are largely finalized, the outlays under
several USDA farm programs for the 2020 marketing year have not yet been finalized and are stil
subject to changes in market conditions. In addition, 2020 crop production has not yet been
finalized (this is not expected until January 2021 at the earliest) and outlays for several
programs—particularly ARC and PLC—have yet to be calculated and announced (this is
expected in September 2021).34
Several open questions wil largely determine whether the United States wil be in compliance
with its amber box spending limit.
1. How wil USDA classify payments from the various ad hoc programs—including
the 2018 and 2019 MFP, and the 2020 CFAP-1, CFAP-2, and any forgiven loans
under PPP—in its notifications to the WTO?
2. Wil the United States engage in additional assistance to agricultural producers
for unsold 2020 crops due to on-going trade disputes or events related to the
COVID-19 pandemic?
3. How wil market conditions and commodity prices evolve in 2020 and 2021 with
respect to final crop values and product-specific de minimis exemptions?
4. What wil the final value of total U.S. farm output be in 2020 for purposes of
evaluating the 5% non-product-specific de minimis exemption threshold against
total non-product-specific AMS outlays?
5. How wil market conditions affect decoupled ARC and PLC payments and total
non-product-specific outlays for the 2020 marketing year?
According to CRS analysis, U.S. domestic support outlays appear likely to be in compliance with
WTO spending limits during 2018, but could exceed spending limits in both 2019 and 2020
(Table 2 and Figure 1).35

34 2020 crop-year forecasts of ARC and PLC outlays are compiled by CRS using calendar-year estimates for 2020 from
USDA’s ERS farm income forecasts, and for 2021 from FAPRI (#05 -20, September 2020). Final 2020 outlays for ARC
and PLC will depend on the evolution of market conditions through the 2020 marketing year which runs through
August of 2021. See the discussion later in this report under “ Lag Between Payments and Notification Complicates
Reporting”.
35 CRS assumes that USDA will follow historical program classification and notification patterns. If USDA took a
different notification strategy, the CRS analysis might be impacted.
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U.S. Farm Support: Outlook for Compliance with WTO Commitments, 2018 to 2020

Figure 1. U.S. Compliance with WTO Spending Limit, 1995-2020
Actual Notifications for 1995-2017; CRS Projections for 2018-2020

Source: Compiled by CRS from official USDA notifications to the WTO for 1995-2017. USDA has not
announced its notification of farm program outlays for 2018 through 2020. Instead, CRS has compiled USDA
spending projections for those years (see Table 1 and Table 2) from USDA Farm Service Agency payment data
as of March 12, 2020, USDA Risk Management Agency crop insurance premium subsidy data as of September 21,
2020, and FAPRI, Baseline Update for U.S. Farm Income and the Farm Balance Sheet, University of Missouri, Report
#05-30, September 2020.
Notes: WTO=World Trade Organization; PS=Product Specific; NPS=Non-product Specific. The two de
minimis exemptions are PS=product specific and NPS=non-product-specific. Official USDA domestic support
outlays and their WTO classification for 2018-2020 wil not be known until USDA makes an official notification
for those years to the WTO. The data presented in this figure assume that USDA notification wil adhere to
historical precedent, and are an approximation based on crop prices, harvested values, and market conditions as
of September 11, 2020. As market conditions change, and new payment data become available, these forecasts
can be expected to change.
Compliance Likely in 2018
In 2018, projected U.S. amber box spending (inclusive of $8.6 bil ion in product-specific outlays
under the 2018 MFP) appears likely to be in compliance with the U.S. spending limit of $19.1
bil ion.36 U.S. amber box spending in 2018 could exceed $16 bil ion after exemptions (Table 2).
This would be the largest U.S. amber box notification since 2000; however, despite its magnitude,
it stil would be less than the U.S. annual spending limit of $19.1 bil ion.

36 For an earlier discussion of how U.S. compliance may be affected by changes made to U.S. farm programs under the
2018 farm bill (the Agricultural Improvement Act of 2018, P.L. 115-334), as well as payments under the 2018 and
2019 Market Facilitation Programs, see CRS Report R45940, U.S. Farm Support: Com pliance with WTO
Com m itm ents.
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Compliance Uncertain in 2019
In 2019, NPS spending is projected to reach a record $18.7 bil ion—primarily due to the
expansion of direct payments under the 2019 MFP to $14.5 bil ion and changes in MFP payment
rate calculations that likely shift the program to a largely NPS classification. USDA made 2019
MFP payments under a formulation that avoids identifying payments with a specific crop.
Instead, the underlying product-specific MFP payment rates are weighted at the county level by
historical planted acres and yields of al eligible crops to produce a single per-acre MFP payment
rate for the entire county. This county-specific rate is then applied to each producer’s total planted
acres for al eligible commodities within that county, irrespective of the share of planted acres for
any particular crop. Thus, payments are coupled to a producer’s having planted at least one
eligible commodity within the county, but they are independent of which commodity or
commodities were planted. Under this specification, the 2019 MFP payments would appear to be
coupled to planted acres—a producer has to plant an eligible crop to get a payment—but non-
product-specific, thus possibly notifiable as non-product-specific AMS.37
The estimated $12.8 bil ion of NPS spending under the 2019 MFP combines with projected
spending of $5.6 bil ion under the PLC and ARC programs and $0.3 bil ion of projected spending
under other NPS programs to reach $18.7 bil ion.
To be exempted from the AMS by the NPS de minimis exemption, NPS outlays must not exceed
5% of the value of total agricultural output. In 2019, USDA estimates the value of output for al
agricultural production activities—both crop and livestock—at $370.6 bil ion which has a 5% de
minimis threshold of $18.5 bil ion.38 If NPS spending exceeds the de minimis threshold by as
much as a dollar, then no NPS exemptions are al owed, and the entire aggregate NPS outlay (not
just the excess above the threshold) wil count against the U.S. spending limit of $19.1 bil ion.
Based on the currently available data, the projected NPS spending total of $18.7 bil ion would
exceed the NPS de minimis al owance of $18.5 bil ion by $0.2 bil ion. If realized, this would be
the first time that the United States failed to fully exempt its NPS domestic support outlays under
the NPS de minimis exemption. The resulting amber box total of $30.2 bil ion would be in excess
of the U.S. spending limit of $19.1 bil ion. Thus, under the notification scenario presented here,
the United States would be out of compliance with its WTO commitment in 2019.
Given the narrow margin for noncompliance, USDA may be able to avoid noncompliance by
classifying some NPS outlays as PS, or by shifting the timing of payments into the preceding year
(2018) or the following year (2020).
U.S. Likely Out of Compliance in 2020
In 2020, U.S. total product-specific (PS) spending (prior to de minimis exemptions) is projected
to be record large at $31.6 bil ion (Table 2)—due primarily to $20.3 bil ion in payments under the
two CFAP programs (Table 1).39 Other substantial sources of projected PS spending include $2.9

37 T his potential notification is based on CRS analysis of the design of the 2019 MFP program and how it corresponds
with previous U.S. notifications. USDA may use a different line of reasoning and notify 2019 MFP payments under a
different WT O classification.
38 T he 2019 value for aggregate U.S. agricult ural production is from: USDA, ERS, “U.S. and State-Level Farm Income
and Wealth Statistics, Annual cash receipts by commodity, U.S. and States, 2008 -2020F,” September 2, 2020;
https://www.ers.usda.gov/data-products/farm-income-and-wealth-statistics/data-files-us-and-state-level-farm-income-
and-wealth-statistics/.
39 As shown in Table 1 and discussed earlier, this includes $7.0 billion of CFAP -1 outlays on livestock and dairy
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U.S. Farm Support: Outlook for Compliance with WTO Commitments, 2018 to 2020

bil ion under the PS portion of PPP grants (i.e., forgiven loans),40 $6.4 bil ion in FCIC premium
subsidies, $1.5 bil ion in sugar price support, and $0.6 bil ion in other smal er PS outlays. PS de
minimis exemptions are projected at $4.1 bil ion, thus leaving $27.4 bil ion in amber box
spending.41
Projected aggregate NPS outlays of $10.4 bil ion in 2020 are expected to be entirely exempt
under NPS de minimis. However, the remaining amber box total of $27.4 bil ion would be in
excess of the U.S. amber box spending limit of $19.1 bil ion by $8.3 bil ion.
Unlike the 2019 scenario—where USDA could consider several alternate notification strategies
based on program classification or payment timing to possibly avoid noncompliance with the
$19.1 bil ion spending limit—the 2020 scenario appears to offer fewer potential strategies for
avoiding noncompliance with the spending limit. This is because the potential noncompliance
derives entirely from PS spending—al projected NPS spending of $10.4 bil ion is likely exempt.
In 2020, CFAP-1 and CFAP-2 spending of $7 bil ion and $11 bil ion, respectively, is product-
specific by design and targeted to production and/or marketing that occurs in 2020. Thus, shifting
of the classification or timing appear to be less viable options.
One possible alternative scenario would involve substantial y larger PS exemptions under the PS
de minimis. However, for greater PS de minimis exemptions to occur, the product-specific output
valuations that are used to derive the 5% PS de minimis thresholds would have to increase
substantial y. For this to occur, higher commodity prices are needed through the end of 2020 to
generate greater final crop production valuations. Under such a scenario, more PS outlays could
then be exempted than the current projected PS exemption of $4.1 bil ion. Recent futures market
price rises suggest that market conditions are at least partial y moving in this direction—the
prices for nearby futures contracts for major grains and oilseeds have risen considerably since
early September (when the ERS farm income forecasts and FAPRI baseline forecasts were
released).42 Farm prices can be expected to move higher in tandem with futures contract prices.
Higher farm prices would raise both estimated crop output values and the PS de minimis
thresholds for affected commodities and, thus, raise the possibility of excluding more PS outlays
than the current projection of $4.1 bil ion in PS de minimis exemptions.
The current projection for AMS of $27.4 bil ion (after deducting $4.1 bil ion in PS de minimis
exemptions) is $8.3 bil ion above the $19.1 bil ion spending limit. It appears that a substantial
increase in farm prices across al commodities—much greater than the recent 10% to 13% rise—
would be needed to exempt an additional $8.3 bil ion in PS spending.43
USDA may notify al PPP-related outlays as non-product-specific. This would reduce non-exempt
AMS to $24.6 bil ion—stil $5.5 bil ion above the $19.1 bil ion spending limit.

products in 2020, and $13.3 billion in CFAP -2 payments in 2020.
40 USDA’s ERS, in their farm income forecast for 2020, includes $5.8 billion (79.5%) in forgiven PPP loans out of a
total of $7.3 billion in agriculture-related PPP loans. T he 79.5% share is applied to both the PS ($3.6 billion) and NPS
($3.7 billion) components of PPP loans to obtain the estimated forgiven PPP loan values of $2.9 billion for each.
41 T his is based on a CRS commodity-by-commodity analysis for over 150 individual products: their estimated
domestic support (including crop insurance premium subsidies, MAL benefits, disaster assistance, and CFAP
payments); their output values; and their calculated de minimis thresholds.
42 T he December corn futures contract on the Chicago Board of T rade has risen 13% since September 1 (from
$3.58/bu. to $4.05/bu.), while the November soybean futures contract has risen about 11% (from $9.55/bu. to
$10.60/bu.).
43 For example, to increase PS de minimis exemptions for any of the commodities with the largest PS support
(estimated at a combined $23.1 billion), the followin g price rises are needed: corn prices must rise by 118%, soybeans
prices by 74%, cattle prices by 194%, dairy prices by 88%, cotton prices by 233%, and wheat prices by 189%.
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U.S. Farm Support: Outlook for Compliance with WTO Commitments, 2018 to 2020

Table 2. U.S. Notifications of Farm Domestic Support: Actual and Projected
Actual (2015-2017) and Projected (2018-2020); $ Bil ions
Actual
CRS Projections
WTO classification
2015
2016
2017

2018
2019
2020
AMS (prior to exemptions)
17.2
16.0
12.9

22.5
33.9
42.0
Product-specific AMS
9.0
8.6
9.5

19.5
15.1
31.6
Non-product-specific AMS
8.2
7.4
3.4

2.9
18.7
10.4
De minimis exemptions
(13.3)
(12.2)
(8.7)

(6.3)
(3.8)
(14.6)
Product-specific de minimis
(5.2)
(4.8)
(5.2)

(3.4)
(3.8)
(4.1)
Non-product-specific de minimis
(8.2)
(7.4)
(3.4)

(2.9)
0.0
(10.4)
Value of U.S. farm output
372.7
355.5
369.3

371.4
370.6
358.3

NPS de minimis threshold (5%)
18.6
17.8
18.5

18.6
18.5
17.9

AMS (after exemptions)
3.8
3.8
4.2

16.1
30.2
27.4
Product-specific AMS
3.8
3.8
4.2

16.1
11.3
27.4
Non-product-specific AMS
0.0
0.0
0.0

0.0
18.7
0.0
WTO Spending Limit
19.1
19.1
19.1

19.1
19.1
19.1
Spending Above WTO Limit
0.0
0.0
0.0

0.0
10.9
8.3
Source: Data for 2015-2017 are from U.S. notifications to the WTO. Data for 2018-2020 are CRS forecasts
based on data from several sources: USDA, ERS, Farm Income Database, September 2, 2020; FAPRI, Baseline
Update for U.S. Farm Income and the Farm Balance Sheet, University of Missouri, Report #05-30, September 2020;
and the Congressional Budget Office, “Baseline of USDA’s Mandatory Farm Program Outlays,” as of March 6,
2020. Federal crop insurance premium subsidies are from USDA’s Risk Management Agency’s Summary of
Business database (as of September 21, 2020). Al data are adjusted by CRS to a crop -year basis and reflect
USDA’s most recently announced payments under ARC and PLC (as of March 12, 2020), 2018 MFP (as of
September 18, 2020), 2019 MFP (as of September 28, 2020) and CFAP-1 (as of September 27, 2020). CFAP-2
payments are estimates from USDA, “CFAP-2 Cost Benefit Analysis,” September 15, 2020.
Notes: AMS=Aggregate Measurement of Support; WTO= World Trade Organization; NPS=Non-product-
specific. Official USDA domestic support outlays and their WTO classification for 2018-2020 wil not be known
until USDA makes an official notification for those years to the WTO. The data presented in this table are an
approximation based on crop prices, harvested values, and market conditions as of September 11, 2020. As
market conditions change and new payment data become available, these forecasts can be expected to change.
Totals may not add up due to rounding.
Several Uncertainties Could Affect Compliance
The projections presented in this report represent a single potential WTO compliance scenario.
These results are based on USDA’s historical notification patterns for domestic support programs,
and existing public data on the current and expected payments. USDA’s eventual notification of
spending under both traditional and ad hoc programs for crop years 2018 through 2020 may vary
from these CRS projections in terms of the following: timing, size, WTO categorization (i.e.,
AMS, blue box, or green box), and specificity (PS or NPS) of final payments.
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U.S. Farm Support: Outlook for Compliance with WTO Commitments, 2018 to 2020

Program Payments Still Outstanding for 2019 and 2020
Payments under the various ad hoc programs have not been finalized, nor has USDA announced
how the payments might be classified according to WTO AMS categories. In addition, eventual
outlays for farm bil programs for the 2019 and 2020 marketing years hinge on several as-yet-
unknown market factors including farm prices, output volumes and values, and program outlays.
If the final farm price and revenue values are higher than currently projected, then program
payments under ARC and PLC could be smal er than those used in this analysis. However, this is
diminishing as a possibility since the 2019 marketing year is complete and final payments are
being tal ied.44 ARC and PLC outlays are unlikely to change substantial y for that year.
With respect to the 2020 marketing year—although unknown at this point—lowering the
projected NPS outlays for ARC and PLC would have no impact on the projected amber box total
under the scenario presented in this report. This is because estimated NPS outlays are projected to
be exempted from counting against the amber box in 2020. Instead, the projected amber box total
in excess of the U.S. WTO spending limit is the result of the forecast for PS outlays of $31.6
bil ion—of which only $4.1 bil ion is projected to be exempted under PS de minimis.
Lag Betw een Payments and Notification Complicates Reporting
U.S. farm payments are calculated for each marketing year. A substantial time lag exists between
the end of a marketing year, the occurrence and final tal y of farm payments for that marketing
year, and their eventual notification to the WTO. For example, ARC and PLC payments for the
2019 crop cannot be announced until late September 2020, and payments may not start until after
October 1, 2020.
Both ARC and PLC need twelve months of price data to calculate the marketing-year average
price for each program crop, which is then used to calculate program payment rates.45 In addition,
producers participating in ARC have to finalize their harvest and crop yield estimates before any
ARC payment rates can be calculated. If winter conditions occur early in the fal , some producers
may not be able to complete their harvests until the following spring, thus delaying the
finalization of their production and yield estimates. USDA has not yet begun to report ARC and
PLC payment data for the 2019 crop year—such reporting may start towards the end of 2020.
Payments for other farm programs are similarly spread out over an extended period, thus delaying
their collection, tal y, and notification.

44 T he 2019 marketing year for corn and soybeans ended on August 31, 2020. USDA’s National Agricultural Statistics
Service (NASS) collects data on 2019 farm prices and other marketing information through September 2020, and is
expected to report final 2019 marketing year values at the end of September 2020. FSA then uses the final 2019
marketing year prices to determine ARC and PLC payment rates for 2019.
45 See previous footnote for a discussion of the timing of marketing year data needed to calculate ARC and PLC
payments. For details on ARC and PLC payment calculations, see CRS Report R46561, U.S. Farm Policy: Revenue
Support Program Outlays, 2014-2020.
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U.S. Farm Support: Outlook for Compliance with WTO Commitments, 2018 to 2020

U.S. Notification of Farm Support Is Based on Crop Year Data
Since the origin of the WTO in 1995, the United States has notified its agricultural support outlays on a marketing
year basis.46 Program outlays are associated with the crop that they are supporting, even if the actual payment
does not occur until a later year. This is an important point, since many farm programs do not make outlays until
after a crop is harvested and the producer has reported acreage and yields to the local USDA county office. Often
this occurs in the calendar year fol owing the planting and harvesting of a crop.
Under a typical timeline, USDA would have notified spending for the 2017 marketing year
sometime between October 2019 and January 2020. The U.S. notification of domestic support for
the 2017 marketing year was delayed until July 24, 2020—more than six months after the normal
notification window.47 Under this extended timeline, U.S. notification of domestic support for
marketing years 2018 and 2019 would occur in mid-2021 and mid-2022, respectively.
The inherent delay in the notification process may affect the likelihood that another WTO
member wil bringing a case, particularly if, by the time of the eventual notification, the ad hoc
payment programs are no longer in existence. 48 If the ad hoc payments are not expected to
continue under future trade or health conditions, the benefit of bringing a case might not have the
deterrence effect that it would if the offending payments were recurring.
Conclusion
Since 1995, the United States has met its WTO commitments; however, this compliance has
relied on using the de minimis exemptions to exclude certain AMS spending from counting
against the amber box limit. USDA has not notified WTO of its domestic support spending for
2018, 2019, or 2020, nor has it indicated how it wil classify outlays under the new ad hoc
spending programs initiated by USDA since 2018.
If USDA follows historical precedent in how it has categorized and notified U.S. domestic
support outlays in recent years, then CRS analysis suggests that the United States wil be in
compliance with WTO spending limits during 2018, but could exceed the annual U.S. spending
limit of $19.1 bil ion in both 2019 and 2020.

46 Crop year and marketing year are often used synonymously. T he marketing year for a crop begins at harvest and runs
for the 12-month period during which the crop is marketed or used on the farm. For example, for the 2020 U.S. corn
and soybean crops, the 2020 marketing year runs from September 1, 2020, through August 31, 2021.
47 WT O, “U.S. Notification of Domestic Support for Marketing Year 2017,” G/AG/N/USA/135, July 24, 2020.
48 T he remedy under WT O dispute settlement rules is withdrawal of the offending subsidy or suspension of
concessions. In general, it would not include damage payments to foreign farmers unless the United States agre es to
such terms under a settlement with the challenging country. For example, the United States successfully challenged
China’s provision of domestic support (in excess of China’s WT O AMS spending commitments) for producers of each
of wheat, Indica rice, Japonica rice, and corn during 2012, 2013, 2014, and 2015. A WT O panel found that the policies
related to corn had expired in 2015 prior to the initiation of the dispute. However, the subsidies provided to wheat and
rice were both germane to the dispute and in violation of WT O commitments. China did not contest the panel findings
and agreed to remove the offending policies by March 31, 2020, concluding the matter without damage payments. See
WT O dispute settlement case DS511, “China—Domestic Support for Agricultural Producers,” https://www.wto.org/
english/tratop_e/dispu_e/cases_e/ds511_e.htm.
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link to page 20 U.S. Farm Support: Outlook for Compliance with WTO Commitments, 2018 to 2020

Table 3. U.S. Notification to the WTO of Domestic Program Support, 2017
$ Bil ions (B) or Mil ions (M) as indicated
Category / Program
Subtotal
Total
Product-Specific (PS) Support

$9.5 B
A. Market Price Support
$1.5 B

1. Sugar market price support ($1.5B)

B. Non-Exempt Direct payments
$1.6 B

2. Marketing Assistance Loan (MAL) benefits ($0)

3. Disaster assistance: LFP, LIP, ELAP, TAP ($496M)

4. Dairy Margin Protection Program (MPP) (-$18M)a

5. ARC/PLC paid on generic base acres ($217M)

6. Cotton Ginning Cost Share program ($216M)

7. WHIP and Florida hurricane block grants ($680M)

C. Other Product-Specific Support
$6.3 B

8. Federal crop insurance premium subsidies for crop and livestock policies ($6.1B)

9. Upland cotton economic adjustment assistance for domestic users ($42M)

10. Cotton and peanut handling and storage subsidies ($0)

Non-Product-Specific (NPS) Support

$3.4 B
1. ARC and PLC programs ($3.1B)

2. Federal irrigation subsidies ($109M)

3. Federal grazing subsidies ($36M)

4. Whole-Farm Revenue Insurance premium subsidies ($101M)

5. Farm storage facility loans ($8)

6. Renewable Energy for America Program (REAP) ($64M)

7. Reimbursement Transportation Cost Payment (RTCP) ($2M)

8. Other

Total Aggregate Measurement of Support (AMS) prior to deductions

$12.9 B
de minimis exemptions from AMS

$8.7 B
Product-Specific de minimis
$5.2 B

Non-Product-Specific de minimis
$3.4 B

Amber Box subject to WTO Payment Limit (i.e., non-exempt AMS)

$4.2 B
Non-exempt Product-Specific AMS
$4.2 B
Non-exempt Non-Product-Specific AMS
$0.0 B

Source: WTO, U.S. Notification of Domestic Support for Marketing Year 2017, G/AG/N/USA/135, July 24,
2020.
Notes: AMS=Aggregate Measurement of Support. Totals may not add up due to rounding.
a. Producer participation fees exceeded program payments by $18.2 mil ion.
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U.S. Farm Support: Outlook for Compliance with WTO Commitments, 2018 to 2020

Author Information

Randy Schnepf

Specialist in Agricultural Policy

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