U.S. farmers will realize $120.6 billion in net income this year, up 6 percent compared to last year and the second-highest amount since 1973.
Still, the amount represents a drop from USDA's February estimate of $128.2 billion, reflecting record harvests that will translate into lower prices and cut into expected farm incomes, the U.S. Department of Agriculture said Tuesday.
The government will pay farmers $11.1 billion in direct payments this year, up from $10.6 billion last year. The Senate and House versions of the pending five-year farm bill will cut these controversial direct payments, instead boosting crop insurance assistance.
A report issued Tuesday by the Natural Resources Defense Council said that the Federal Crop Insurance Program paid out a record $17.3 billion in 2012 to compensate farmers for crop losses stemming from the year's historic drought.
The NRDC, among others, has criticized the government's crop insurance policy, saying it amounts to a support program that's overly burdensome to taxpayers, and is calling on Congress to limit insurance subsidies when it takes up the farm bill after its August recess.
The 2008 Farm Bill, which expired last year, was extended by Congress for one year, until Sept. 30.