Agricultural Provisions in the Big Beautiful Bill

On May 22, 2025, the House of Representatives passed H.R. 1, the One Big Beautiful Bill Act, by a vote of 215-214. In addition to many other sections, this budget reconciliation bill includes provisions typically authorized and funded through a farm bill (the Agricultural Improvement Act of 2018 expired in 2023 and is on its second extension). Although it appears that the bill would increase funding for many agricultural programs over 10 years, the CBO projects that the Title I (typical farm bill) provisions in this bill would reduce the deficit by $238 billion over 10 years. This is largely due to the SNAP restrictions in the bill.

This review summarizes key provisions drafted by the Committee on Agriculture. For more information about tax-related provisions in this bill, read this post.

Nutrition

The bill would reduce the federal share of the cost of administering the Supplemental Nutrition Assistance Program (SNAP) from 50 percent to 25 percent. The bill would thus increase the state’s administrative costs to 75 percent. The bill would also require all states to begin paying at least 5 percent of the costs of SNAP benefits. Currently, the federal government pays 100 percent of the benefits. The bill would also require those states with error rates greater than 6 percent to pay between 15 percent (6-8 percent error rate) and 25 percent (10 percent or more error rate) of the cost of SNAP benefits.

The bill would require able bodied adults without dependents to continue to work through age 64 to receive SNAP benefits. The current age ceiling is 54 years old. The bill also changes the definition of dependent from children under 18 years old to children under 7. The bill would allow exceptions to these rules for homeless individuals and veterans to expire in 2030.

Safety Net - Statutory Reference Prices

The bill would increase statutory reference prices for all covered commodities. The proposed reference price increases, which would range from 10 to 21 percent, are as follows.

Beginning with the 2031 crop year, the stated reference price would increase each year by .5 percent. At no time could the reference price exceed 115 percent of the proposed statutory reference price set forth above.

Base Acres

The bill would provide farmers with a one-time voluntary opportunity for new base acres beginning with the 2026 crop year. The new base acre allocations could not exceed 30 million acres across the country. Generally, farms would be eligible to receive an allocation of base acres if their five-year average for planted and prevented plant covered commodity acres (2019 through 2023) exceeded their current base acres. The farmer could also include in this calculation acres planted to non-covered commodities, in an amount up to15 percent of the total farm acres. If the number of allocated acres across the country exceeds 30 million acres, the USDA would reduce all allocations on a pro rata basis to stay within that limit.

Program Extensions and Expansion

The bill would extend the Price Loss Coverage (PLC), Agricultural Risk Coverage (ARC), and Dairy Margin Coverage (DMC) programs through 2031. The ARC’s guarantee would increase from 85 percent to 90 percent of the benchmark revenue for crop years 2025 through 2031, and the payment rate calculation would include 12.5 percent, rather than 10 percent, of the benchmark revenue for those years. The bill would increase the coverage limit for the DMC to the first 6 million pounds (up from 5 million pounds) for both Tier I and Tier II premiums. It would allow dairy producers to receive a one-time premium discount of 25 percent for the years 2026-2031. The bill would also provide several livestock safety net changes, including a payment rate for losses due to adverse weather or disease at 75 percent of market value.

Finally, the bill would increase the marketing assistance loan rates for covered commodities for the years 2026 through 2031.

Payment Limitations and AGI Limit

The bill would seek “equitable treatment of certain entities” by specifically allowing “qualified pass through entities,” including S corporations and LLCs not taxed as C corporations, to be treated in the same manner that general partnerships are currently treated under the payment limitation attribution rules. For example, S corporation shareholders actively engaged in farming would each have their own payment limit, not capped by a separate entity payment limit.

The bill would also increase the general payment limitation for commodity programs from $125,000 to $155,000, to be adjusted annually for inflation.  Additionally, the bill would allow those who derive more than 75 percent of their average gross income from farming, ranching, or silviculture activities to be exempt from the general $900,000 AGI limit.

Crop Insurance

The bill would retain the highest coverage level for individual farm coverage at 85 percent and area coverage at 95 percent with the enhanced coverage option. The bill would add a new top coverage level of 90 percent for coverage aggregated across multiple commodities. The bill would also increase premium assistance available to beginning farmers and ranchers and extend their time to qualify as a beginning farmer from 5 years to 10 years.

Finally, the bill would increase premium support across the board and increase administrative and operating subsidies for insurers in higher-risk states.

Conservation

The bill would redirect the unobligated Inflation Reduction Act conservation funds to the permanent farm bill baseline. These funds would primarily be used to increase opportunities through the Agricultural Conservation Easement Program, the Environmental Quality Incentives Program, and the Conservation Stewardship Program, from 2026 through 2031. The Rural Conservation Partnership Program would receive a much smaller allocation. The use of these funds would not be restricted to climate smart projects. Other funds would be directed toward the Watershed Protection and Flood Prevention Operations account for watershed protection and flood prevention. The bill would also support the Grassroots Source Water Protection Program, the Voluntary Public Access and Habitat Incentive Program, and the Feral Swine Eradication and Control Pilot Program through 2031.

Notably, the bill does not address the Conservation Reserve Program, which is scheduled to expire at the end of 2025.

Other Key Provisions

In addition to the above sections, the bill includes many other provisions, including:

• Funding a program to encourage the accessibility, development, maintenance, and expansion of commercial export markets for United States agricultural commodities
• Funding agricultural research, including a specialty crop research initiative
• Extending the Secure Rural Schools program through 2026
• Authorizing USDA’s Bioenergy Program for Advanced Biofuels through 2031
• Increasing funding for programs supporting specialty crops and USDA-certified organic agriculture
• Funding for animal disease prevention and management
• Funding for the National Animal Health Laboratory Network, the National Animal Disease Preparedness and Response Program, and the National Animal Vaccine and Veterinary Countermeasure Bank

What’s Ahead?

It is unclear how much of the bill will be endorsed by the Senate. It is also unclear if the bill’s measures could all survive the review of the Senate parliamentarian, who must eliminate changes “extraneous” to the budget under the so-called Byrd Rule.

With all eyes on the Senate, we will keep you posted.