Future Looks Bright after Passage of Recent Legislation
The Fourth of July weekend was not only a celebration of our nation’s 249th birthday, but also a weekend where farmers could breathe a small sigh of relief. With the passage and signing of the One Big Beautiful Act (OBBA) by the current administration, a pathway was built for the upcoming creation and passing of what’s being described as the “Skinny Farm Bill.” The OBBA included provisions that farmers have long needed and will help pave the way for a more comprehensive and rejuvenated Farm Bill
This OBBA continues essential commodities programs and increases spending on agricultural initiatives by an estimated $66 billion over ten years. The Congressional Budget Office (CBO) estimates that the Agricultural Title will reduce overall spending by $120 billion, mainly through cuts to the nutrition subtitle. This sets the stage for the new farm bill. A brief history of the farm bill shows that it was created during the Great Depression to address an agricultural crisis. Since then, it has grown into a comprehensive omnibus bill, typically revised every five years, covering everything from Supplemental Nutrition Assistance Program (SNAP) requirements to commodity programs, conservation efforts, trade, credit, rural development, research, extension, and other fields like education, forestry, energy, horticulture, animal health, farmworker safety, and more. It also funds and manages various programs supporting new farmers and ranchers, socially-disadvantaged farmers, and veterans. The last farm bill passed in 2018 and was expected to be revised and rewritten in 2023, but the previous administration only made minor updates, leaving farmers with outdated and limited support.
However, a new farm bill is on the way and there are hopes it will be passed and signed by September. The OBBA included several key sections to help farmers and addressed some of the key complex matters for farmers.
“The Big, Beautiful Bill, really set up the farm bill, which appears we’ll get across the finish line,” says Frank Howell, President of Delta Council in Leland. “We’re cautiously optimistic. The bill provided some wiggle room in this unprecedented area of back-and-forth. It provides a much more robust safety net of 2025 and 2026 crops. And that should certainly help.”
The OBBA included monies for disaster crop losses in the 2023 and 2024 crop seasons. Along with a new “safety net” for farmers moving forward.
“That’s the reference: that if a crop gets below a certain level of support, you never want to be in a situation where your line is so low. But unfortunately, we’re in a situation where it’s so expensive to produce a crop and it’s historically low. The safety net will kick in for a lot of producers,” says Howell.
The ARC (Agricultural Risk Coverage) provides payments when a farm’s revenue drops below a certain guaranteed level, while PLC (Price Loss Coverage) offers payments when market prices fall below a set reference price. In the past, farmers had to choose one or the other at planting, but now they can choose “whichever one is most advantageous,” according to Howell.
“It really truly is like a two-step dance, and we weren’t going to get to the end of the farm bill without first getting those other issues taken care of and it just so happened that the recessions package came along and provided that vehicle,” says Howell. “And I think as you look in the House with Chairman G.T. Thompson, and in the Senate with Chairman John Bozeman, their proposals are pretty well aligned, and so I think things are going to fare pretty well this fall.”
Dr. Steve Martin noted that most everyone across the ag world was happy with the OBBA and its provisions and how it is setting up the new farm bill.
“Most everyone in our part of the agriculture and livestock industry is pretty happy with it. We’ve got some higher reference prices and a little more help with crop insurance, which gives an opportunity to update some base acres, and that’s a good thing,” says Martin. “It raised our reference prices—what’s referred to as statutory reference prices, because that’s what they are. And the 2018 Farm Bill had this feature, too. They can be raised if market prices raise. But at a bottom line, corn went from $3.70 to $4.10. Rice, $14 went from a hundredweight to $16.90. And, seed cotton, went from $37 to $42.”
The OBBA also added the provision, “Beginning with the 2031 crop year, the stated reference prices will increase each year by 0.5 percent.”
Farmers’ base acres also received some focus. Typically, farms are eligible for a base acres allocation if their five-year average of planted and prevented plant covered commodity acres (from 2019 through 2023) goes beyond their current base acres. Farmers can also include in this calculation acres planted to non-covered commodities, up to fifteen percent of the total farm acres. If the total allocated acres nationwide surpass 30 million acres, the USDA must reduce all allocations proportionally to stay within that limit.
Looking ahead at what’s left to do with the 2025 Farm Bill, Martin says, “Basically, if you read some of the language, what they’ve got left to do on a farm bill is what they call a ‘Skinny Farm Bill.’ And it’s just reauthorizing some things that are already in the farm bill. But basically, for your commodity programs, that’s done. You’ve got education nutrition programs and that’s also all done.
The 2025 Farm Bill will cover areas such as:
• Commodity support programs for staple crops like corn, soybeans, wheat, cotton, and rice;
• Crop insurance and disaster assistance;
• Nutrition assistance, primarily through the Supplemental Nutrition Assistance Program (SNAP);
• Conservation initiatives to protect soil, water, and wildlife;
• Rural development programs, including broadband expansion and infrastructure;
• Research and extension services to promote agricultural innovation.
As of July, the 2025 Farm Bill wasn’t approved by both chambers of Congress. Conference committee negotiations are ongoing, with lawmakers working to resolve differences before the new fiscal year begins in October. Failing to pass the bill on time would necessitate temporary extensions of existing programs or lead to a return to outdated permanent law provisions.
Key deadlines include:
• August: Aim for the conference committee to finalize a compromise bill
• September: Congressional votes planned in the House and Senate
• October 1: Beginning of the new fiscal year with the farm bill ideally taking effect
Observers predict that, despite issues remaining, the bill’s broad bipartisan support for its importance increases the likelihood of passage before the deadline.