House and Senate Clash Over Key Farm Provisions

Key Takeaways

House and Senate versions of the farm bill show alignment but differ in certain provisions, particularly regarding farmer support and budget impact.
Senate bill allows farmers to select the best payment program without requiring new sign-ups, adding around $1 billion to costs.
CBO’s analysis of the bill projects a deficit increase of $2.8 billion from 2025 to 2034, raising concerns among budget-conscious lawmakers.

Farm Bill Developments

In recent discussions, Republicans in both the House and Senate have demonstrated a cohesive approach to the provisions of the farm bill included in their budget reconciliation. However, the Senate’s version is somewhat more expensive and offers enhanced benefits for corn and soybean growers. Some elements of the Senate Agriculture Committee’s section of the bill may undergo changes pending a review by the Senate parliamentarian, a process known as a “Byrd bath.” This allows minority staff to challenge specific provisions based on Senate rules.

A decision on these agricultural provisions is anticipated soon, after which Senate Agriculture Committee members can address any issues flagged by the parliamentarian before the legislation advances to the Senate floor. The House recently made adjustments to its bill following initial concerns from the parliamentarian, including a change in how funding is allocated for programs like the Market Access Program and Foreign Market Development Program.

A key difference between the two chambers lies in commodity payments. The Senate version allows farmers to benefit from the Price Loss Coverage (PLC) or Agriculture Risk Coverage (ARC) program based on whichever offers a higher payment this year. In contrast, the House bill mandates a new signup process for these programs. This provision in the Senate version simplifies the process for farmers and is expected to be popular, adding an estimated $1 billion to the bill’s budget.

Both versions propose to raise PLC reference prices, which trigger payments when market prices fall below set thresholds. The House bill includes a minimum price of $3.30 per bushel for corn, expected to save around $4 billion over a decade. Additionally, disparities exist in how the PLC reference prices are calculated, with the Senate setting a higher floor at 88%.

The Supplemental Coverage Option (SCO) is another point of contention. Under the Senate’s bill, farmers could purchase SCO while also enrolling in ARC, unlike the House version, which restricts this option. The premium subsidy for SCO would also see an increase in both bills, benefitting Midwest growers in particular.

Both the House and Senate bills aim to support crop insurance companies in states experiencing high losses, with the Senate version proposing broader eligibility for administrative and operating expense payments, which could include traditionally low-risk states like Iowa and Illinois.

According to a dynamic analysis from the Congressional Budget Office (CBO), the House-passed bill could lead to a deficit increase of $2.8 billion from 2025 to 2034, even considering projected economic growth. This raises alarms among lawmakers focused on fiscal responsibility. The analysis indicates a larger revenue reduction than spending cuts, contributing to increased federal debt interest rates.

Overall, while there are conflicting elements between the House and Senate bills, the negotiation process will be crucial in aligning these disparities as legislators seek to finalize a comprehensive farm bill.

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