Rice, dairy, beef, and pork producers in the United States received an estimated $800 to $2,600 in federal benefits per ton of methane (CH4) emitted in 2020. 1 The EPA estimates annual methane emissions from the agriculture sector at just over 10 million tons per year. 2 This is on par with methane emissions from the entire energy sector. 3 

Note 👉 Obviously, it's not the intention of Congress and the USDA to encourage greenhouse gas production. But when roughly half of agriculture subsidies encourage the production of methane-emitting goods, the consequence is that methane production is inadvertently encouraged too. We take a look at the numbers in this article.

Whether from fossil fuels or agricultural practices, a kilogram (kg) of methane released today warms the earth 104 times more powerfully than a kg of CO2, when comparing over the first ten years. (130 times that of CO2 when accounting for feedback effects). 4

Based on publicly available data about federal spending and national methane emissions, here's the math behind how the federal government subsidized the agriculture sector in 2020, and to what degree those supports applied to methane emissions.

PCoP

The Public Cost of Production

Comparing agricultural products by $ subsidies per ton methane emitted, at first, makes intuitive sense. It borrows from the concept of methane taxes, which are in units of dollars per ton. However, in the case of subsidies, comparisons break down for agricultural products that produce no methane (when the denominator approaches zero, the metric approaches infinity). So for this article, we limit our comparisons using this metric ($/ton) comparison to only the narrow group of products that produce the most methane.

At AFA, we find that a more useful comparison metric for subsidies in general might be called the Public Cost of Production (PCoP) where the two costs to the public are multiplied together. So, at the end of each section, we've calculated the PCoP in units of 'million dollar megatons CH4' by multiplying annual subsidies by annual methane emissions. This metric provides a more useful way of comparing rice, beef, pork, dairy and beyond.

The Public Cost of Production (PCoP)
= (millions of dollars in subsidies) x (million tons CH4)

Note: For all calculations, we've omitted payments from the Covid PPP program. We did this because, unlike the Coronavirus Food Assistance Programs (CFAP1 & CFAP2), it seems the PPP program was applied fairly equitably across small businesses in and beyond the agriculture sector.                                  5

Read AFA's 2021 Letter to the Editor in the Washington Post

Pigs

Pork producers received an estimated $1,150 for every ton of CH4 emissions when considering direct subsidies. Producers all along the supply chain benefited $2,600 per ton when factoring in subsidies that make corn and soy livestock feed cheap.

Methane emissions from pigs in 2020

Pigs produced 1.039 million tons of CH4 in 2019. Since pig populations were down 1% during 2020, 6 we estimate 2020 methane emissions at 99% of 2019 levels, or 1.029 million tons.

Hog farmers received an estimated $1.2 billion in 2020 direct subsidies federal benefits

  • CFAP 1: $612,290,000 7
  • CFAP 2: $533,210,000 8
  • MFP: $60,000,000 9

Hog farmers benefited by an additional $1.48 billion from U.S. federal supports to corn and soy

Soy: Of the $4 billion in 2020 soy supports, $420 million can be attributed to benefiting pork production through making feed cheaper.

  • Soy subsidies totaled $4 billion in 2020 10
  • 71% of soy grown becomes animal feed 11 so approximately $2.8 billion in soy subsidies indirectly benefit livestock producers.
  • Of the soy fed to animals, approximately 15% is fed to pigs 12 so $2.8 billion x 15% = $420 million

Corn: Of the $9 billion in 2020 corn supports, $1.06 billion can be attributed to pork production via indirect subsidies that make feed cheaper.

  • Corn subsidies totaled approximately $9 billion in 2020 13
  • An estimated 46% of corn is fed to animals every year 14 or $4.14 billion.
  • Of the corn fed to animals, approximately 25.6% is fed to pigs, 15 resulting in $1.06 billion in subsidies attributable to pork.

Taken all together, direct subsidies of $1.2 billion plus indirect subsidies of $1.48 billion equal $2.68 billion for pork production in 2020.

The Public Cost of Pork in 2020
= $2,680 million x 1.029 million tons
PCoP(pork)= 2,758 million dollar megatons CH4

Dairy

Dairy producers received approximately $1,200 per ton CH4 in direct subsidies, and $1,400 per ton CH4 including indirect subsidies.

Direct Subsidies to Dairy farmers in 2020 are estimated at $3.2 billion

  • Dairy Margin Coverage Program: $150,592,000 16
  • CFAP 1: $1,789,820,000 17
  • CFAP 2: $1,185,461,000 18
  • MFP: $66,000,000 19 estimate

Indirect Subsidies to Dairy Producers were approximately $940 million in 2020

  • Of the soy fed to animals, approximately 7% is fed to dairy herds 20 resulting in an indirect subsidy to dairy of $196 million.
  • Of the corn fed to animals, approximately 18% is fed to dairy cattle, 21 resulting in an indirect subsidy to dairy of $745 million.

Dairies in the U.S. emitted an estimated 3 million tons of CH4 in 2020.

The dairy sector accounted for 1,729 kt CH4 from enteric emissions and 1,281 from manure emissions, totaling 3.01 million tons in 2019. (see tables 5-4 and 5-8 above from EPA Inventory of Greenhouse Gases). The dairy herd count grew from 8.801 million at the end of 2019 to 8.866 22 at the end of 2020. Therefore, a conservative estimate of emissions for 2020 can be 3 million tons.

Dairy farmers benefited at a rate of $1,100 to $1,400 per ton CH4

The Public Cost of Dairy in 2020
= $4,200 million x 3 million tons CH4
PCoP(dairy)= 12,600 million dollar megatons CH4

Cattle

For every ton of CH4 emissions from cattle, producers benefited between $1,300 to $1,700.

Direct benefits to cattle producers totaled $7.25 billion. However, accounting for indirect feed subsidies, the total was $8.9 billion 23

Direct Subsidies to Cattle Production came in at an estimated $7.25 billion in 2020

  • CFAP 1: $4,363,150 24
  • CFAP 2: $2,793,135 25
  • Grazing Discounts on Public Land: $100,000,000 26 27

Indirect Subsidies to Cattle totaled at least $1.6 billion in 2020

  • Of the soy fed to animals, approximately 8% is fed to cattle 28 resulting in an indirect subsidy of $224 million.
  • Of the corn fed to animals, approximately 27% is fed to cattle, 29 resulting in an indirect subsidy of $745 million.

The Public Cost of Cattle in 2020
= $8,900 million x 5.2 million tons CH4
PCoP(cattle)= 46,280 million dollar megatons CH4

Rice

Rice growers received federal benefits of approximately $800 per ton CH4 emitted in 2020.

Rice growers received an estimated $484 million in 2020

  • Crop Insurance: $88,352,000 30
  • CFAP 2: $40,600,000 31
  • ARC/PLC: $354,800,000 32

Rice production released an estimated 600 kilotons of CH4 in 2020

2019 emissions from rice cultivation were 602 kt. Based on acres planted, 2020 was similar to 2016, which would put emissions at about 630 kt. However, in the interest of making conservative estimates as we await the 2020 data, we assume 600kt. This allows for improvements in methane conservation methods since 2016. 33 34

The Public Cost of 2020 Rice Production
= $484 million x 0.6 million tons CH4
PCoP(rice)= 290 million dollar megaton s CH4

For context, many countries tax methane emissions, especially from fossil fuel usage. For example, Norway charges $1,300 per ton of CH4 emissions. 35

Moreover, these estimates are low; conservation programs and disaster relief programs lack enough transparency to attribute the many billions in payments to specific end products. We didn't include the Coronavirus PPP program even though that would add hundreds of millions of dollars to the equations. Also, while some programs report data, it isn't specific enough for comparing agricultural products. For example, we know that, the EQIP program must award at least 50% of conservation grant money to livestock producers 36 , but cannot assess the portion attributed to each livestock product. Subsidized livestock insurance 37 and disaster relief programs like LFP and LIP are similar in that we know all of the money compensated livestock producers, but not of which animals.

If you have more up-to-date information, please contact AFA and we will update this page.

More articles on Federal Agriculture Subsidies

  1. These estimates are based primarily on data from the EPA and the USDA. In some cases, data from third-party sources such as industry trade groups were used. Wherever 2020 data exists and is detailed enough to trace payments to a product category, that data is reported directly. Moreover, data for 2020 is sometimes extrapolated and/or pro-rated from 2019 data, adjusting for changes in acreage planted or animal headcounts year to year. All estimations err on the side of conservative assumptions.
  2. https://www.epa.gov/sites/default/files/2021-02/documents/us-ghg-inventory-2021-chapter-5-agriculture.pdf#page=3 table 5-2
  3. https://www.epa.gov/sites/default/files/2020-04/documents/us-ghg-inventory-2020-main-text.pdf#page=128
  4. https://www.agriculturefairnessalliance.org/news/wp-content/uploads/2021/03/WGI_AR5_Chap_8_SM.pdf (p.39)
  5. https://www.brookings.edu/bpea-articles/has-the-paycheck-protection-program-succeeded
  6. https://downloads.usda.library.cornell.edu/usda-esmis/files/rj430453j/7d279j76f/g445d5751/hgpg1220.pdf
  7. https://www.farmers.gov/cfap1/data
  8. https://www.farmers.gov/cfap2/data
  9. https://www.farmers.gov/sites/default/files/2020-12/FarmersGov-Manage_Market-Facilitation-Program-Data12-21.pdf pro-rated for 2020 based on 2020 annual spending from https://data.ers.usda.gov/reports.aspx?ID=17833
  10. https://afa.farm/soy
  11. https://www.usda.gov/sites/default/files/documents/coexistence-soybeans-factsheet.pdf
  12. https://soygrowers.com/wp-content/uploads/2019/10/Soy-Stats-2019_FNL-Web.pdf (p.30)
  13. https://afa.farm/corn
  14. https://www.usda.gov/sites/default/files/documents/coexistence-corn-factsheet.pdf
  15. http://worldofcorn.com/#corn-feed-by-species
  16. https://data.ers.usda.gov/reports.aspx?ID=17833
  17. https://www.farmers.gov/cfap1/data end of year 2020
  18. https://www.farmers.gov/cfap2/data end of year 2020
  19. https://www.farmers.gov/sites/default/files/2020-12/FarmersGov-Manage_Market-Facilitation-Program-Data12-21.pdf pro-rated for 2020 based on 2020 annual spending from https://data.ers.usda.gov/reports.aspx?ID=17833
  20. https://soygrowers.com/wp-content/uploads/2019/10/Soy-Stats-2019_FNL-Web.pdf (p.30)
  21. http://worldofcorn.com/#corn-feed-by-species
  22. https://www.ers.usda.gov/webdocs/DataFiles/48685/Dairyglance.xlsx?v=3954.5
  23. https://afa.farm/beef
  24. https://www.farmers.gov/cfap1/data end of year 2020
  25. https://www.farmers.gov/cfap2/data end of year 2020
  26. https://www.biologicaldiversity.org/programs/public_lands/grazing/pdfs/CostsAndConsequences_01-2015.pdf
  27. https://www.counterpunch.org/2020/03/10/wildlife-pays-the-price-for-subsidized-livestock-grazing-on-public-lands/
  28. https://soygrowers.com/wp-content/uploads/2019/10/Soy-Stats-2019_FNL-Web.pdf (p.30)
  29. http://worldofcorn.com/#corn-feed-by-species
  30. https://www3.rma.usda.gov/apps/sob/current_week/crop2020.pdf
  31. https://www.farmers.gov/cfap2/data
  32. https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/arc-plc/2019/pdf/2019_arc_plc_payments.pdf pro-rated for 2020 based on 2020 annual spending from https://data.ers.usda.gov/reports.aspx?ID=17833
  33. https://www.epa.gov/sites/production/files/2021-02/documents/us-ghg-inventory-2021-chapter-5-agriculture.pdf Table 5-2: Emissions from Agriculture (kt)
  34. 2019 Rice acres planted 2,550,000, 2020 acres planted 3,036,000 https://quickstats.nass.usda.gov/results/DB1BE043-F7B4-3D69-8881-042FBFD1D86D
  35. https://www.iea.org/reports/methane-tracker-2020/improving-methane-data
  36. https://www.federalregister.gov/documents/2019/12/17/2019-26872/environmental-quality-incentives-program
  37. https://www.rma.usda.gov/Policy-and-Procedure/Insurance-Plans/Livestock-Insurance-Plans