What’s in the Big Beautiful Bill for agriculture?

In early July, the reconciliation bill titled the “One Big Beautiful Bill Act” was passed after marathon sessions in both chambers of Congress and was signed by President Donald Trump.
The legislation marks a major milestone in the policy agenda for 2025, with sweeping language covering taxes, border security, energy, Medicaid and food assistance, budget cuts, and even farm programs — among other things.
The primary political debate over the past several months and into the final hours focused on the tax policy changes, Medicaid cuts and food assistance cuts. The tax policy changes would extend many of the tax provisions passed back in 2017 that were set to expire at the end of 2025. The tax changes will reduce expected federal revenues, and thus count against the budget baseline under federal budget rules.
The proposed changes to Medicaid and food assistance included language relating to fraud and mismanagement and payment rates, and various eligibility rules are expected to reduce federal spending substantially.
The fact that tax changes generally benefiting wealthier taxpayers increased, while spending on Medicaid and food assistance for poorer individuals and households were cut, provided the fodder for most of the political debate that was generally split down partisan lines in each chamber.

How about agriculture?
Amid the political rancor and focus on spending, it may seem surprising that agriculture received a significant increase in spending for federal farm support and other farm bill provisions, along with some favorable energy and tax provisions as well.
The agricultural committees were originally tasked with finding billions of dollars in budget cuts as part of the reconciliation process, but they ultimately made $120 billion in budget cuts over 10 years to agriculture and food programs by cutting food assistance programs by $186 billion, while increasing farm support by $62 billion and other programs approximately $4 billion on net.
Federal farm legislation was two years overdue for reauthorization, and there have been repeated calls for increased support in the next farm bill — particularly as crop prices have fallen over the past three years — but the pathway that led to provisions in the reconciliation bill and increases in farm program spending at the expense of food assistance seems unprecedented.
Time will tell if the current developments permanently disrupt the traditional farm-and-food coalition needed to get a farm bill across the finish line for most of the past six decades.
In the meantime, there are numerous changes for ag producers to understand and react to right away in commodity programs, disaster assistance and crop insurance provisions, as well as conservation and other programs.
For covered commodities, the new law makes changes immediately for the 2025-31 crop years. It increases support levels for Price Loss Coverage, Agriculture Risk Coverage and commodity marketing loans, and makes changes to payment limit and eligibility rules beginning right away for the 2025 crop year. The language also provides for the addition of new base acres in 2026.
The statutory reference prices for PLC generally increase from 10 percent to 20 percent, with corn going from $3.70 per bushel to $4.10 per bushel, as an example. The effective reference price for corn for 2025 was already higher than that based on a moving average formula, but an increase in the formula from 85 percent to 88 percent of the moving average and an increase in the cap on the effective reference price moves everything higher, and the corn reference price for 2025 moves from $4.26 to $4.42 per bushel.
The effective reference prices for grain sorghum, soybeans and wheat move from $4.51 to $4.67, from $9.66 to $11.50, and from $5.56 to $6.36 per bushel, respectively, significantly increasing the potential support from the PLC program. The statutory reference prices also increase automatically under a formula tied to inflation beginning in 2032, establishing an increasing baseline for future legislation.
There are increases for ARC as well. The guarantee increases from 86 percent to 90 percent of the benchmark revenue (moving average yield times moving average price), and the protection band increases from 10 percent to 12 percent of the benchmark revenue.
Essentially, ARC protection shifts from an 86 percent to 76 percent revenue band to a 90 percent to 78 percent revenue band, changing the relative revenue risk exposure of producers going forward and likely their optimal crop insurance decisions as well.
While these changes to PLC and ARC will take effect immediately, producers will not be required to re-visit their enrollment decision for 2025. Instead, the program will pay producers the higher of the payment rate under either PLC or ARC-CO (ARC at the county level) for the 2025 crop year and will return to the annual PLC vs. ARC enrollment decision in 2026.

Crop insurance
Producers will also benefit from increased crop insurance program support in the legislation. Federal premium support (subsidy) levels increase from 3 to 5 percentage points. As a result, the federal subsidy for buy-up coverage changes from the current 38 percent to 64 percent of total premium to 41 percent to 69 percent of total premium based on buy-up coverage level.
Beginning farmers and ranchers will qualify for additional premium support over a 10-year period instead of the previous five-year period, and they will receive additional premium support on top of existing support over the first four years.
Support for the Supplemental Coverage Option insurance policy also increases to a guaranteed level at 90 percent instead of 86 percent (consistent with the change in ARC), an increased subsidy rate to 80 percent of total premium, and the elimination of the previous prohibition on SCO participation if enrolled in ARC.
Standing disaster assistance programs remain in the new legislation, with some improvements in each of the programs. The payment rate in the Livestock Indemnity Program increases from 75 percent to 100 percent of market value for losses due to predation by federally protected species.
In the Livestock Forage Disaster Program, payment rates under a D2 drought designation will increase as well. Instead of a one-month payment for D2 drought for eight consecutive weeks during the grazing season, the revised payment rates include a one-month payment for D2 for four consecutive weeks and a two-month payment for D2 for any seven of eight consecutive weeks.
There are additional commodity provisions for sugar and dairy, including an increase in the Tier I production history limit for Dairy Margin Coverage from 5 million pounds to 6 million pounds. There are also general provisions that will expand program payment limits and eligibility rules.

Conservation provisions
Beyond the commodity provisions, the legislation makes some limited changes to other parts of the farm bill. In the conservation title, the provisions mostly move money around to grow baseline conservation programs spending going forward by rescinding unobligated funds from one-time Inflation Reduction Act authority. The legislation also add funds for other targeted areas, including trade, research, horticulture and animal disease programs.
While the reconciliation bill addresses major parts of the farm bill in commodity support, crop insurance, conservation, food assistance and some other key additions, it did not cover all programs. It also could not address provisions not directly related to changes in spending levels such as policy provisions that have been proposed to address state-by-state production and marketing requirements (e.g., California Prop 12 provisions).
So, even as the reconciliation bill largely settles the farm bill debate for 2025, it still leaves remaining provisions and policy decisions to address in what may be a “skinny” farm bill before the current extension expires at the end of September. Whether there will still be a coalition to push the rest of the farm bill across the finish line later this year remains a question after the process and outcome that got us to this point.
The author of this article, Brad Lubben is a Nebraska Extension associate professor, policy specialist and director of the North Central Extension Risk Management Education Center in ag economics at the University of Nebraska-Lincoln.  This article was originally published in Nebraska Farmer and is reprinted with permission.