Key Takeaways

• Senate has passed a bill increasing farm program spending by $66 billion over 10 years, subject to House approval.
• Major funding increases include $50.4 billion for Price Loss Coverage and enhancements to the Agricultural Risk Coverage program.
• Significant tax benefits and incentives for biofuel production are also part of the legislation.

Farm Program Spending Surge

Farm groups stand to benefit greatly from the Senate’s approval of President Donald Trump’s One Big Beautiful Bill. This legislation proposes a $66 billion increase in farm program spending over the next decade, beginning with the 2025 crop year. While funding is set to rise, it comes partly from historic cuts to the Supplemental Nutrition Assistance Program (SNAP), raising concerns among Democrats about the viability of a standalone farm bill.

Key funding allocations include $50.4 billion for Price Loss Coverage (PLC), which will see adjustments to reference prices by 10%-20% and allow enrollment on an additional 30 million base acres. The PLC offers payments to farmers when commodity prices fall below established benchmarks. Farmers utilizing Agricultural Risk Coverage (ARC) will also see an improvement, with the maximum coverage level increasing to 90% of benchmark revenue guarantee—up from the current 76%-86% range.

Recent analyses indicate that wheat growers would specifically benefit, with projected payments rising from significantly lower amounts under current law. PLC could offer 95 cents a bushel, compared to just 6 cents previously. This automatic calculation of the most beneficial program for farmers means they will not need to decide between ARC and PLC until after the 2025 planting season.

For corn and soybean producers, the ARC program remains the most advantageous, with projected payments of 32 cents per bushel for corn and 70 cents for soybeans, outperforming PLC.

Other Farm Assistance Measures

The legislation also includes provisions for milk producers in the Dairy Margin Coverage (DMC) program, increasing coverage levels and offering discounts on fees. Sugar growers are set to benefit from elevated loan and storage rates. Meanwhile, supplemental disaster assistance programs are projected to receive nearly $2.9 billion in funding.

Crop insurance will see expanded subsidies and an increase in coverage options. Funding for specialty crop programs and agricultural research initiatives will also increase, with the Specialty Crop Research Initiative gaining an additional $95 million annually.

Tax and Biofuel Incentives

On the tax front, the bill proposes to permanently retain the 20% Section 199A deduction for pass-through business income. The estate tax exemption would rise to $15 million for individuals and $30 million for couples, indexed for inflation. Additionally, Section 179 expensing limits would be raised to $2.5 million.

In the biofuels sector, the legislation includes a two-year extension of the 45Z clean fuels credit, reducing its value for sustainable aviation fuel but maintaining support for biodiesel. This aspect was a point of negotiation, with expectations for future adjustments through appropriations.

Overall, the bill aims to provide substantial financial support to America’s farmers while stimulating the agricultural economy through increased crop insurance options, subsidies, and tax incentives.

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