Reviewing the Agricultural Provisions in the One Big Beautiful Bill Act

On July 4, 2025, the President signed H.R. 1, the One Big Beautiful Bill Act into law. In addition to its many other sections, this so-called “mega bill” enacts many provisions typically authorized and funded through a farm bill. The previous farm bill—the Agricultural Improvement Act of 2018—expired in 2023, and several of its key provisions were on their second temporary extension, set to lapse in 2025. This Act continues crucial commodities programs and increases spending for agricultural programs by an estimated $66 billion over 10 years. However, the Congressional Budget Office (CBO) estimates that the Agricultural Title as a whole will reduce spending by $120 billion, primarily through cuts to the Nutrition subtitle.

Because the bill was passed using the budget reconciliation process, it could only include measures that directly affect federal spending or revenue. A separate, smaller farm bill may be introduced this fall to address additional provisions. That bill would require 60 votes in the Senate to pass. This post summarizes key provisions in the Agricultural Title of the Act.  For information about tax-related provisions in the Act, see our companion post.

Nutrition (Subtitle A)

Section 10105. The Act implements cost sharing between states and the federal government for Supplemental Nutrition Assistance Program (SNAP) benefits. Currently, the federal government pays 100 percent of the cost of the benefits. The new cost shifting structure is based upon state payment error rate, defined as follows:

 the sum of the point estimates of an overpayment error rate and an under-payment error rate determined by the Secretary from data collected in a probability sample of participating households

Beginning in fiscal year 2028, the federal government would continue to pay 100 percent of the cost of SNAP benefits for those states with error rates below six percent. Those states with error rates greater than six percent but less than eight percent would pay five percent of the costs, those with error rates equal to eight but less than 10 percent would pay 10 percent of the cost of the benefits, and those with error rates of 10 percent or more would bear 15 percent of the cost of the benefits. The Act also contains provisions that could delay the implementation of these cost sharing requirements beyond 2028 as states seek to reduce error rates.

Section 10106. The Act reduces the federal share of the cost of administering SNAP from 50 percent to 25 percent, beginning in Fiscal Year 2027. The Act thus increases the state’s administrative costs to 75 percent.

Section 10102. The Act requires able-bodied adults (those 18 and over) without dependents to continue to work (generally 20 hours per week) through age 64 to receive SNAP benefits. The prior age ceiling was 55 years old in 2025. The Act also changes the definition of dependent from children under 18 years old to children under 14. The Act also removes exceptions to work requirements for homeless individuals, veterans, and those under the age of 24 who had been in foster care until age 18.

Commodities (Subtitle C)

Statutory Reference Prices (Section 10301)

The Act increases statutory reference prices for all covered commodities, beginning with the 2025 crop year. The reference price increases are as follows.

Beginning with the 2031 crop year, the stated reference prices will increase each year by 0.5 percent. At no time can the reference price exceed 113 percent of the proposed statutory reference price set forth above. Under the Act, the effective reference price (for PLC calculations) is the lesser of:

• An amount equal to 113 percent (down from 115 percent) of the reference price for such covered commodity OR
• An amount equal to the greater of—
  • the reference price for such covered commodity; or
  • Beginning with crop year 2025, 88 percent (up from 85 percent) of the Olympic average of the five most recent marketing year average crop prices

Base Acres (Section 10302)

The Act provides farmers with a one-time voluntary opportunity for new base acres beginning with the 2026 crop year. The new base-acre allocations may not exceed 30 million acres across the country.

Generally, farms are 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 can 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 must reduce all allocations on a pro rata basis to stay within that limit.

Producer Election (Section 10303)

The Act provides that the USDA will—for each covered commodity for the 2025 crop year—automatically pay farmers the higher of price loss coverage (PLC) or agricultural risk coverage - county (ARC-CO) for their commodity.  Farmers will receive these payments in October of 2026.

The Act requires producers to elect the program in which they wish to participate for crop years 2026-2031. If producers cannot agree on an election, they will receive no payment for crop year 2026 and they will receive the same coverage for the 2027 through 2031 crop years that they received for the 2025 crop year.

The Act allows producers to elect the Crop Insurance Supplemental Coverage Option (SCO) if they elect PLC or ARC. Previous law did not allow SCO coverage for producers who elected ARC.

Program Extensions and Expansion (Section 10304, 10305, 10313)

The Act extends the PLC, ARC, and Dairy Margin Coverage (DMC) programs through 2031. The Act increases the ARC coverage guarantee for a crop year to 90 percent of the benchmark revenue (up from 86 percent). It also increases the ARC-CO benchmark revenue cap to 12 percent (up from 10 percent). The Act increases 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.

Equitable Treatment of Certain Entities (Section 10306)

The Act for the first time allows “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 or LLC members actively engaged in farming would each have their own payment limit, not capped by a separate entity payment limit.

Payment Limitations (Section 10307)

The Act increases the general payment limitation for commodity programs from $125,000 to $155,000. This limit will be adjusted annually for inflation.  

Adjusted Gross Income Limitation (Section 10308)

The Act allows those who derive 75 percent or more of their average gross income from farming, ranching, or silviculture activities to be exempt from the general $900,000 AGI limit for certain conservation and disaster payment programs.

It newly defines farming, ranching, or silviculture activities to include agritourism, direct-to-consumer marketing of agricultural products, the sale of agricultural equipment owned by the person or legal entity, and other agricultural activities as determined by the USDA Secretary.

Marketing Loans (Section 10309)

The Act increases the marketing assistance loan rates for all covered commodities for crop years 2026 through 2031.

Livestock Indemnity Payments (Section 10401)

The Act increases payment rates for losses due to predation to 100 percent of market value (up from 75 percent). The payment rate for losses due to weather remains at 75 percent. The Act creates coverage for the first time for losses of unborn livestock. The payment rate is less than or equal to 85 percent of the payment rate established with respect to the lowest weight class of the livestock. The number of payments will correspond to the type of livestock. For example, producers receive one payment for cattle and horses but 12 payments for swine.

Crop Insurance (Subtitle E)

The Act expanded crop insurance benefits for beginning farmers and ranchers, increased coverage options, and made crop insurance more affordable. These changes are effective for policies with a sales closing date on or after July 1, 2025. 

Beginning Farmer and Rancher Benefit (Section 10501)

The Act increases premium assistance available to beginning farmers and ranchers and extends their time to qualify as a beginning farmer from five years to 10 years. Specifically, for each first and second reinsurance years that a beginning farmer participates, they receive additional premium assistance of five percentage points, for the third reinsurance year their assistance equals three percentage points, and for the fourth reinsurance year it is set at one percentage point. This supplemental premium assistance is in addition to other premium assistance subsidies they receive.

The Act did not update benefits associated with being a Veteran farmer or rancher. If a producer qualifies as a beginning farmer and a veteran, they are eligible for the higher benefit.

Crop Insurance Coverage (Section 10502)

The Act maintains the highest coverage level for individual farm coverage at 85 percent and area coverage at 95 percent with the enhanced coverage option. The Act adds a new top coverage level of 90 percent (up from 85 percent) for coverage aggregated across multiple commodities (whole farm revenue protection).

The Act increases the premium subsidy from 65 to 80 percent for SCO coverage. It also increases the coverage level for SCO from 86 percent to 90 percent (beginning with the 2027 crop year).

Premium Support (Section 10504)

The Act increases crop insurance premium support subsidies by three to five percent, depending upon the coverage level.

Poultry Insurance Pilot Program (Section 10507)

The Act creates a pilot program under which contract poultry growers can elect to receive index-based insurance to cover higher utility costs—like gas, electricity, and water—caused by extreme weather.

Rural America Investments (Subtitle F)

Conservation (Section 10601)

The Act redirects unobligated Inflation Reduction Act conservation funds to the permanent farm bill baseline. Conservation funding is as follows:

Agricultural Conservation Easement Program

$625,000,000 for fiscal year 2026;
$650,000,000 for fiscal year 2027;
$675,000,000 for fiscal year 2028;
$700,000,000 for fiscal year 2029;
$700,000,000 for fiscal year 2030; and
$700,000,000 for fiscal year 2031.

Environmental Quality Incentives Program (EQIP)

$2,655,000,000 for fiscal year 2026;
$2,855,000,000 for fiscal year 2027;
$3,255,000,000 for fiscal year 2028;
$3,255,000,000 for fiscal year 2029;
$3,255,000,000 for fiscal year 2030; and
$3,255,000,000 for fiscal year 2031

Conservation Stewardship Program

$1,300,000,000 for fiscal year 2026;
$1,325,000,000 for fiscal year 2027;
$1,350,000,000 for fiscal year 2028;
$1,375,000,000 for fiscal year 2029;
$1,375,000,000 for fiscal year 2030; and
$1,375,000,000 for fiscal year 2031.

Regional Conservation Partnership Program

$425,000,000 for fiscal year 2026;
$450,000,000 for fiscal year 2027;
$450,000,000 for fiscal year 2028;
$450,000,000 for fiscal year 2029;
$450,000,000 for fiscal year 2030; and
$450,000,000 for fiscal year 2031.

The use of these conservation funds is not restricted to climate smart projects. Other funds are directed toward the Watershed Protection and Flood Prevention Operations account ($150,000,000 per year), the Grassroots Source Water Protection Program ($1,000,000), the Voluntary Public Access and Habitat Incentive Program ($70,000,000), and the Feral Swine Eradication and Control Pilot Program ($105,000,000).

The Act does not address the Conservation Reserve Program, which is authorized only through fiscal year 2025.

Other Key Provisions

In addition to the above sections, the Agricultural Title of the Act includes 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
• 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

We will watch to see if a pared-down farm bill is introduced in the weeks to come. Legislation will be required to extend the Conservation Reserve Program beyond 2025. Many legislators have also discussed passing federal legislation to restrict states from controlling the production practices of producers from other states (in response to Proposition 12 and similar state legislation).