by Ryan Hanrahan, University of Illinois’ FarmDoc project
Champagne, IL — Agri-Pulse’s Philip Brasher and Rebekah Alvey reported that “House GOP leaders overcame Republican objections to Senate provisions on SNAP, rural hospitals and other issues to clear President Donald Trump’s massive spending and tax package, including a historic infusion of new farm program funding.”
“The bill, which passed 218-214 after a long night of drama, will provide $66 billion in new spending for farm programs while extending the 2017 Tax Cuts and Jobs Act and the 45Z biofuels tax credit. It will be the largest amount of new funding for farm programs since 2002,” Brasher and Alvey reported. “Trump is expected to sign the bill on Friday.”
“The 870-page measure, dubbed the One Big Beautiful Bill, will set a new precedent for agricultural policy by paying for increased spending for farmers by cutting nutrition assistance,” Brasher and Alvey reported. “The bill will cut spending on the Supplemental Nutrition Assistance Program by an estimated $186 billion over 10 years, in part by expanding work requirements to adults as old as 64 and to parents of school-age children. States will also for the first time be required to start sharing the cost of SNAP benefits.”
“For farmers, the bill is expected to sharply increase payments through the Price Loss Coverage and Agriculture Risk Coverage programs, while cutting crop insurance premiums and putting new money into trade promotion initiatives and agricultural research,” Brasher and Alvey reported. “Farmers will be allowed to enroll up to 30 million additional acres into PLC and ARC.”
“The Congressional Budget Office estimates the overall bill will increase federal deficits by $3.4 trillion over the 10-year period since the cost of extending the 2017 tax cuts and adding new ones, combined with new funding for GOP priorities, far exceeds the projected savings from cuts to SNAP, Medicaid and other programs,” Brasher and Alvey reported.
Farm Bill Updates
Progressive Farmer’s Chris Clayton reported that “the bill raises reference prices under the Prices Loss Coverage program (PLC) and the Agricultural Risk Coverage (ARC) program. For the current crop year, the Senate bill has language that USDA will provide producers with the higher calculated payment rate for ARC or PLC.”
“Some commodities will benefit more than others. Crops with the largest acreage — corn, wheat and soybeans — would see fewer per-acre gains under the bill than farmers who have base acres for cotton, peanuts and rice,” Clayton reported. “Payment limits would increase from $125,000 to $155,000 for individuals and $310,000 for married couples and then the payment limit would increase based on adjustments for inflation. The bill also eliminates income caps for farmers or entities that draw at least 75% of their income from agriculture or forestry.”
“Addressing a long-time challenge with base acres, the bill will allow USDA to add up to 30 million new base acres tied to planting history from 2019-23,” Clayton reported. “As University of Illinois’ economists noted, it’s likely USDA will have to come up with a prorated formula for determining eligible acres that will be added to commodity program. However, the bill does not allow producers to reallocate their current base acres.”
“Crop insurance programs would see about $6.3 billion in increased spending over 10 years with higher premium subsidy levels for some supplemental area-based plans and other improvements to premium support,” Clayton reported. “Provisions also boost crop-insurance premium support for beginning farmers. A pilot insurance program for poultry producers also will be created.”
“Livestock producers will receive 100% indemnities for livestock lost to predation and 75% compensation for animals lost to weather events or disease. Indemnities also will be available for losses involving unborn livestock,” Clayton reported. “Dairy Margin Coverage (DMC) is increased to cover up to 6 million pounds of milk produced. Dealing with the push to increase agricultural trade, the bill doubles funding for USDA’s trade promotion programs.”
Tax Provisions
Clayton reported that “the bill includes extensions, permanent updates and additions to business-tax provisions farmers and other small businesses can use to invest in equipment, pass on their property to heirs, or buy and sell farmland under more favorable terms. Other incentives in the bill will help solidify domestic biofuel production at a time when farmers need increased domestic demand for both corn and soybeans.”
“The estate-tax exemption is made permanent and increased to $15 million for individuals and $30 million for married couples starting in 2026,” Clayton reported. “For biofuels, the 45Z Clean Fuels Production Credit is extended and modified. The bill restricts qualifying feedstocks to the U.S., Canada and Mexico, which shuts out products such as used cooking oil from China.”
Farm Groups React
Successful Farming’s Natalina Sents Bausch reported that “agriculture leaders and organizations erupted with reaction headed into the holiday weekend. …(American Farm Bureau Federation) President Zippy Duvall kept his comments brief following the passage of legislation that will bring ‘certainty’ to farmers and ranchers.”
“‘Modernizing important farm safety net programs and making permanent critical tax provisions could be the difference between staying in business or shutting down the family farm,’ Duvall said,” according to Sents Bausch’s reporting. “He added, ‘More than half of farmers are losing money, so an increase in reference prices is desperately needed, and tax tools will help farmers and ranchers plan for the next season and the next generation.'”
“(National Farmers Union) President Rob Larew began his statement acknowledging the positive aspects of the bill,” Sents Bausch reported. “Larew expressed concern, as well. ‘However, these gains are paired with harmful tradeoffs. Cuts to SNAP divide the farm bill coalition and reductions in Medicaid will have harmful effects on millions of Americans. Farm policy should unite us. This approach undermines the foundation of the farm bill and puts its future at risk,’ he said.”
