Government payments paid directly to producers are expected to total $12.4 billion in 2010, a 1.5-percent increase from the $12.3 billion paid out in 2009. This level would be 19 percent below the 5-year average for 2005-09. Direct payments under the Direct and Countercyclical Program (DCP) and the Average Crop Revenue Election Program (ACRE) are forecast at $4.81 billion for 2010. Direct payment rates are fixed in legislation and are not affected by the level of program crop prices. However, the 4-percent decline in direct payments forecast in 2010 relative to the 5-year average is due to producers receiving $430 million in revenue insurance payments from the ACRE program in 2010. Authorized under the Food, Conservation, and Energy Act of 2008, ACRE provides revenue insurance to producers in exchange for a 20-percent reduction in their annual direct payment allotments.

Countercyclical payments are forecast to decrease by 82 percent from $1.17 billion in 2009 to $210 million in 2010. Strong cotton prices are responsible for this projected decrease. Only upland cotton and peanuts are expected to receive countercyclical payments in 2010.

Marketing loan benefits—including loan deficiency payments, marketing loan gains, and certificate exchange gains—are projected at $120 million in 2010, down 89 percent from 2009 levels. Because of the high durum wheat loan rate, durum wheat producers are expected to receive 93 percent of these benefits—despite the recent run-up in global wheat prices. The other wheat classes do not qualify for marketing loan benefits. Prior to 2010, upland cotton producers realized almost 91 percent of the total marketing loan benefits. However, strong current year cotton prices are expected to remain too high for cotton producers to qualify for marketing loan benefits. The other crops receiving marketing loan benefits are barley, wool, mohair, and pelts.

The Milk Income Loss Contract Program (MILC) compensates dairy producers when domestic milk prices fall below a specified level. Rapidly declining milk prices, due to the global recession, generated $880 million in MILC payments in 2009. For 2010, rebounding milk prices are expected to reduce MILC payments to $55 million.

Forecast at $820 million in 2010, Tobacco Transition Payment Program (TTP) payments are expected to continue the declining trend beyond 2010, albeit at a decreasing rate. Payments reported here include both CCC payments and lump-sum payments. Begun in 2005, this program provides annual payments over a 10-year period to eligible quota holders and producers of tobacco. Since the inception of the program, lump-sum payments to individuals have been made through agreements with third parties in return for the producers' and quota owners' rights to the 10-year TTP payment stream.

Conservation programs include all conservation programs operated by the Farm Service Agency (FSA) and the Natural Resources Conservation Service (NRCS) that provide direct payments to producers. Estimated conservation payments of $3.15 billion in 2010 reflect programs being brought up toward funding levels authorized by current legislation.

Ad hoc and emergency disaster program payments are forecast to be $2.82 billion in 2010, an increase of 335 percent over the $648 million paid out in 2009. The 2008 Farm Act created a permanent fund for disaster assistance, the Agricultural Disaster Relief Trust Fund. Supplemental Revenue Assistance Payments (SURE) from this fund and from the 2009 Recovery Act are expected to amount to $1.93 billion in 2010. The Crop Assistance Program payments are expected to amount to $420 million in 2010. All other disaster programs—including primarily the Emergency Conservation Program, Livestock Forage Program, Livestock Indemnity Program, and Noninsured Assistance Program—are functioning at existing statutory authority and appropriation levels. Once a county is declared eligible for disaster relief, producer eligibility in these programs depends on the extent to which their crop or livestock losses meet a particular program's threshold.