Digging Deeper...

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Senate Agriculture Committee Chairwoman Debbie Stabenow released the text of the Senate’s 2025 Farm Bill on Monday, November 18. It arrived with little more than a month before funding for many farm programs in the current farm bill disappears. Senate Majority Leader Charles Schumer implored Congress to move the legislation forward to avoid opting for an extension of the current bill. This 2025 Farm Bill under discussion is Sen. Stabenow’s last change to shape farm and nutrition policy before her retirement at the end of the 118thCongress.
By Dennis McLaughlin, McLaughlin Writers LLC. Sources: Jim Wiesemeyer, Professional Farmers of America, Inc., Nov. 18, 2024; Paul Neiffer, Farm CPA Report, Nov.18, 2024; Jerry Hagstrom, The Hagstrom Report, Nov. 18, 2024; Agri-Pulse Communications, Nov. 20, 2024; U.S. Senate Committee on Agriculture, Nutrition & Forestry Press Release, Nov.17, 2024.

Can Farm Bill 2025 Get Over The Finish Line This Year?

Congress has a lot to do before it adjourns, says Jerry Hagstrom, principal of The Hagstrom Report. That includes passage of a measure to fund the government and raise disaster aid for hurricane and flood a victims. “With that in mind,” he notes, “prospects for passage of a farm bill this year appear slim.”

But Sen. Debbie Stabenow appears undaunted. In a statement as she unveiled the Senate’s1,397-page farm bill entitled The Rural Prosperity and food Security Act, the senator said, “The foundation of every successful farm bill is built on holding together the broad bipartisan farm bill coalition.”  She went on to say, “This is a strong bill that invests in all of agriculture, helps families put food on the table, supports rural prosperity and holds that coalition together.”  

Not everyone is in agreement. Senate Ag Committee ranking member John Boozman (R-Ark.) explained that an 11thhour partisan proposal is troubling. National Pork Producers Council president Lori Stevermer said, “This is not a viable bill, as it fails to provide a solution to California Prop 12.”  Stevermer, who was a featured speaker this year at the Agricultural Business Council’s Ag Outlook Forum, explained that pork producers have continually spoken up about the negative impacts of this issue. “It is a shame these conversations were disregarded.” 

Senior Republican on the Senate Appropriations Committee, Kansas Senator Jerry Moran commented that since Congress can’t pass a farm bill this year the panel will “focus fully” on negotiating “a natural disaster and economic assistance supplemental for farmers and ranchers who have suffered from high input costs and low commodity prices along with drought.”

What’s New In Stabenow’s Farm Bill Text?

Stabenow’s bill is unlikely to become law, but the text provides a useful barometer for the consensus among Senate Ag Democrats, whose support will be required to reach the 60 votes necessary to pass a farm bill and conduct most Senate business. Importantly, the Senate Ag Committee’s Rural Prosperity and Food Security Act includes $39 billion in new resources to keep farmers farming, families fed and rural communities strong. “It provides farmers with the certainty of a 5-year farm bill and the immediate help they need to manage the urgent needs of the present. It ensures that the Supplemental Nutrition Assistance Program (SNAP) keeps up with the realities of American life, and brings the historic investments in climate-smart conservation practices into the farm bill.” Investments include these allocations:

  • $20 billion to strengthen the farm safety net to support all of agriculture and establishes a permanent structure for disaster assistance so emergency relief reaches farmers faster;

  • $8.5 billion to help families make ends meet, put food on the table, and improve access to nutrition assistance;

  • $4.3 billion to improve quality of life in the rural communities that millions of Americans call home.

More Details

Experts and pundits were quick to identify key features of the senate’s Farm Bill. Paul Neiffer. Publisher/Editor of Farm CPA Report, commented on items that stood out for him:

  • Reference Prices: The House proposal raised reference prices by approximately 10-20%. The Senate proposal appears to raise reference prices by a flat 5% (rounded).

  • Increase in Base Acres: Only underserved and disadvantaged farmers may increase base acres:

    • Based on average of 2018-2022 plantings

    • Includes prevent planted acres

    • Maximum increase of 160 acres per farm

    • If disadvantage farmer does not farm acres during 2025-2029, then increased base acres are eliminated

    • Special 2023 and 2024 ARC/PLC election

    • Automatic election to be paid the highest amount for 2023 and 2024 crop year even if the farmer originally elected ARC or PLC.

  •  Limit on PLC Payment: The maximum amount of payment for PLC will be 15% of the effective reference price. As example, assume a farmer has a PLC yield of 200 bushels for corn and the effective reference price is $4.30 and the final corn harvest price is $3.50. Under the old PLC rules, the farmer could receive 200 bushels times 80 cents per bushel or $160. Under this proposal, the farmer is limited to 65 cents or $130 per acre.

  • Partial PLC Payments: Instead of waiting until after October 1 to collect a PLC payment, the farmer, in certain situations may elect to receive up to 50% of the crop beginning February 1. This is based on firm projections by USDA that the final harvest price will be below the effective reference price. If USDA pays too much, then the farmer must pay it back.

  • Agricultural Risk Coverage: As expected, the Bill increases the guarantee from the current 86% to 88%, less than the 90% in the House Bill. However, not expected, the Bill increases the maximum payment to 12.50% of benchmark revenue, matching the House Bill and makes this retroactive to the 2024 crop. 2023 crop remains at 10%.

  • Partial ARC Payments: Provides same mechanism for partial payments as under PLC.

  • Increase to Marketing Loan Rates: For 2025 crops and subsequent years, the loan rate will be the lesser of 110% of current loan rates or an adjustment based on current input costs versus a five-year average.

  • Sugar Program: Increase sugar cane payment to 24 cents per pound for 2025-2029. Sugar beet growers will receive 136.5% of sugar cane payment rate.

  • Permanent ERP: Emergency Relief Program would be made permanent (at least until next farm bill). Payment limits of $500,000 for specialty crops and $250,000 for all other crops. Terms appear similar to old ERP programs, but it does not mandate how USDA will administer it, etc. Also, no extra payment limit if you can prove you are a farmer. This may still be messy for CPAs to help farmers calculate their claim. Also, requires farmers to insure all acres.

  • Adjusted Gross Income (AGI) limits: AGI limits dropped from $900,000 to $700,000.Increases AGI limits to $1.5 million for specialty and high-value crops.

    • What happens if a farmer grows both? The Bill does not address this, other than likely leave it up to USDA to come up with rules.

    • Waiver of AGI rules available to economically distressed producer.

    • It appears that no payments will be allowed if the land is owned by someone or an entity whose AGI is over $700,000. This means that a farmer who is cash renting that ground will not qualify for any payment on that ground.

    • Under current rules and the House Farm Bill proposal, any farmer who is cash renting the ground and their AGI is under the limit will qualify for a payment.

    • This is a major change and will create the law of unintended consequences. The Senate bill seems to want to not have an incentive for wealthier individuals to purchase land since their high AGI will not qualify them for any payments. But under current rules they get no payment anyway.

  • Increase in CCC Scoring: For purposes of CBO scoring, the restrictions on utilizing CCC funds will be $6.7 billion per year for 2024-2033. The last scoring by CBO was $400 million per year.

  • CRP Rentals Limit Increased to $125,000 from current $50,000.

  • Crop Insurance Changes: Increases subsidies for beginning and veteran farmers and ranchers to essentially match House proposal.

    • Increases SCO to allow for payment at 88% instead of 86% of guarantee. House was at 90%.

    • Increases premium subsidies.

  • Makes improvements to Whole Farm and Micro Farm insurance plans.

End Game

Reporting in Farm Journal (November 18, 2024), Jim Wiesemeyer, Professional Farmers of America, Inc., indicated the reaction of his contacts who have been following farm bill negotiations could be phrased as, “Wow, finally, but too late.” He wrote that even the “usually optimistic Congressional House Ag Committee Chair, Glenn Thompson, signaled it’s time to focus on a 2018 farm bill extension by year’s end.