This summer, with the passage of the “One Big Beautiful Bill Act” (OBBBA), Congress addressed a very substantial share of the key policies that are needed for the U.S. agriculture sector. The measure extended and expanded many of the key tax policy provisions that were set to expire at the end of this year. In addition, the bill served as the vehicle to update and bolster the farm safety net. These updates primarily focused on the commodity and crop insurance titles of the Farm Bill, along with incorporating the Inflation Reduction Act (IRA) additional funding for conservation programs into the permanent budget baseline for four key programs – EQIP, CSP, ACEP, and RCPP. The measure also increased funding for USDA’s market development and export promotion programs.
In the commodity title, reference prices in the ARC/PLC program are increased across the board, along with an increase in the ARC guarantee level. Most crop loan rates in the Marketing Assistance Loan program are increased, many for the first time in decades. Provisions regarding payment eligibility and payment limitations are updated to better reflect the economic realities of today’s family farms and the levels are indexed to inflation going forward. The bill will also provide an opportunity to add base acres (up to 30 million total) to farms with no program crop base or that are under based. The additional base acres will likely be prorated so as not to exceed the 30-million-acre cap. Many of these updates will be effective with the 2025 crop year, while others in the crop insurance program will apply beginning with the 2026 crop.
The crop insurance title includes a number of enhancements and expanded coverage, along with higher premium subsidies that will help offset more of the cost for purchasing risk management protection. For a detailed overview, explanation, and specific levels of updated support, please view these links – One Big Beautiful Bill Act: Final Agricultural Provisions | Market Intel | American Farm Bureau Federation and Farm Bill Updates | Farmers.gov.
Looking ahead, there remain a number of important programs and policies in the Farm Bill that must be reauthorized and updated by the end of this year. This includes titles involving Conservation, Credit, Rural Development, Research, and Forestry. House Agriculture Committee Chairman, G.T. Thompson (R-PA) is working to advance the Farm Bill (or Farm Bill 2.0 as some refer to it) through the Committee before Thanksgiving with the goal of Congress approving the new Farm Bill by the end of this year. Senate Agriculture Committee Chairman, John Boozman (R-AR) is also focused on advancing the remaining policies in the Farm Bill, but the timing in the Senate is less clear at this point.
Given all the competing policy priorities within Congress, and the need to complete the annual appropriations bills this fall, floor time and bandwidth for Congress to fully complete the Farm Bill 2.0 is very uncertain. As of this update, we are one week away from a federal government shutdown due to the lack of Congress finalizing any of the 12 annual appropriations bills for Federal departments and agencies, including USDA. If a government shutdown occurs, the Administration has broad discretion on what functions and staff are deemed ‘essential’ and can continue to operate and which are not until funding is restored. A shutdown would likely further delay completing the Farm Bill 2.0 this year and significantly disrupt USDA operations, including its ongoing work to administer and deliver the economic and natural disaster assistance currently underway to support farmers and ranchers. If the Farm Bill 2.0 is not completed by yearend, then another extension will be necessary of the programs and policies not already addressed in the OBBBA.
The remaining Congressional calendar in 2025 is short for Congress to complete its necessary work on Federal funding for fiscal year 2026 and the farm policy updates needed with the Farm Bill 2.0, although opportunity remains for the Farm Bill work to get wrapped into a broader end-of-year package late this year before Congress adjourns.
