What’s next for farm programs?

House Agriculture Committee Chairman Glenn “GT” Thompson still wants to work on legislation that he calls “farm bill 2.0” this fall, but for now, farmers and ranchers scored significant wins with the passage of President Donald Trump’s “One Big Beautiful Bill”.

Thompson, R-PA, told reporters recently the bill would need about $8 billion in additional funding over 10 years, far less than the $66 billion in spending included in the budget reconciliation bill and paid for out of cuts to funding for the Supplemental Nutrition Assistance Program.

The budget bill would provide aid to farmers, largely starting in 2026.

The biggest funding increase will be in Price Loss Coverage, about $50.4 billion over 10 years, according to the Congressional Budget Office, reflecting an increase in reference prices of 10% and 20% and a provision allowing farmers to enroll up to 30 million new base acres. The program triggers payments on base acreage of a commodity when market prices for the commodity fall below reference prices.

Farmers who use Agriculture Risk Coverage, which provides payments based on county revenue and is especially popular with corn and soybean growers, will benefit. The bill would raise the ARC maximum coverage level to 90% of benchmark revenue guarantee and increase the payment band to 12%. Under current law, ARC covers a payment band between 76% and 86% of benchmark revenue. 

An analysis provided to Agri-Pulse by Terrain indicates wheat growers in particular could benefit from the boost to PLC.

Based on current price projections, wheat growers would likely see a payment of 80 cents a bushel from ARC and 95 cents a bushel from PLC, if the enhancements in the bill become law. Earlier this year Terrain estimated that, based on current law set by the 2018 farm bill, wheat growers would get just 28 cents a bushel under ARC and only 6 cents a bushel from PLC.

Under a provision in the Senate’s bill, farmers don’t have to worry about which program they signed up for in March, because the U.S. Department of Agriculture will automatically calculate which program will provide a farmer the most money for 2025 and pay them accordingly. After this year, farmers will again have to start choosing between ARC and PLC heading into planting season.

For corn and soybean growers, the latest Terrain analysis suggests ARC would remain the most beneficial program under the legislation.

Other key farm program and tax changes

Lawmakers included several other provisions that had originally been considered for a new farm bill, including:

• Supplemental disaster assistance programs are enhanced at a projected cost of nearly $2.9 billion.
• Both House and Senate bills increase crop insurance premium subsidies and boost the top coverage level and premium subsidy for the area-based supplemental coverage option. Subsidies on individual-based policies would increase 3% to 5% depending on the coverage level. The Senate-passed bill would allow farmers who buy SCO to also enroll in the ARC program, not just PLC. The House version limited farmers to PLC. CBO estimates increased premium subsidies will cost taxpayers $3.1 billion over 10 years and that the enhancements to SCO will cost $1.4 billion.
• Trade promotion programs would get a funding increase of $2.2 billion, according to CBO. Spending on agricultural research programs is projected to increase by $1.6 billion. Annual mandatory funding for the Specialty Crop Research Initiative would be increased from $80 million to $175 million. The Foundation for Food and Agriculture Research would get an additional $37 million. 
• For milk producers, the bill would increase the Dairy Margin Coverage program’s Tier I and Tier II coverage levels from the first 5 million pounds of milk to the first 6 million pounds of milk. Producers also could lock in a 25% discount on DMC fees by signing up for 2026 through 2031. CBO estimates the cost of the DMC changes to be $100 million over 10 years.
• Sugar growers would benefit from increased loan rates and storage rates for both cane sugar and sugar beets.

In addition the package includes several tax provisions that farmers and ranchers have long supported, including:

• Makes permanent the 20% Section 199A deduction for pass-through business income.
• Increase the estate tax exemption to $15 million for an individual, or $30 million per couple, and index the limit to inflation. The higher exemption would be permanent.
• Section 179 expensing limits would be increased and full bonus depreciation would be restored. The amount a business can expense through Section 179 would be raised to $2.5 million and reduced by the amount the investment exceeds $4 million.

More farm bill provisions ahead?

In September, Thompson said he wants to address several farm bill provisions that were not included in the massive budget package, such as reauthorization of the Conservation Reserve Program; limits for USDA direct and guaranteed loans; rural broadband assistance; and a provision to trigger permanent price-support laws if existing commodity programs are allowed to lapse after 2031.

In addition, there are several nutrition assistance issues he wants to address, including expanding SNAP eligibility for ex-convicts and families of young adults who are still in school and whose income counts toward their family eligibility for SNAP.

Editor’s note: Sara Wyant is publisher of Agri-Pulse Communications, Inc., www.Agri-Pulse.com.