For the second year in a row, Congress failed to successfully pass a new farm bill. According to the farm bill still in use, we’re still operating like it’s 2018, but there’s nothing about the economy or farming that looks the way it did almost seven years ago.

 It’s not easy to successfully pass a bill through Congress, that’s abundantly clear. The farm bill seems to be on the honey do list of Congress that gets lost in the garage before anything gets crossed off. If there was a solid reason why the farm bill has yet to be passed in recent years, then that question wouldn’t need to be asked in the first place. That’s how American Farm Bureau Federation Associate Economist Samantha Ayoub described it.

“Not having a current farm bill is a reflection of the political climate we’re in right now,” Ayoub said. “It’s very divided with a lot of different opinions on the farm bill. In the last administration we had a Democratic-led Senate, and the House was led by a Republican majority and that makes things even more difficult.” With plenty on their to-do list already, including passing a budget for the 2025 fiscal year, which is long overdue, the farm bill isn’t exactly a priority. While that outlook seems dismal, there’s some hope on the horizon.

In December, the Biden administration passed the 2025 American Relief Act. This allocated $9.8 billion for market relief payments for 20 covered crops. It also provided funding for natural disaster recovery which covers losses from droughts, wildfires, hurricanes and floods ($21 billion); including $2 billion of that allocated for livestock producers. For a complete breakdown and tools to estimate your potential payment, visit this link. “The Congressional mandate on those payments is that they have to begin making payments 90 days after it passed, so payments should start coming at some point in March,” Ayoub said.

Why It Matters

“Between COVID and inflation, we’re operating in a completely new farm economy,” Ayoub said. “Things are more expensive and the Agriculture Risk Coverage [ARC] and Price Loss Coverage [PLC] reference prices in the 2018 bill are completely outdated. Things are more expensive to produce and we’re seeing significant net losses thanks to inflation and those reference prices aren’t keeping up with the current economy.” Farmers can carry over losses for two years in their taxes, which is about the only major tie between the farm bill and the tax code. “Farmers are generally affected by the individual side of the tax code more than others because they’re not typically registered as a business,” Ayoub explained. “Most farms take their revenue and put it directly into their income taxes.”

Even with only about 20 percent of the farm bill pertaining to production agriculture, it’s still important for Congress to get the bill right. That’s why organizations like the American Farm Bureau Federation are focusing on updating the safety net reference prices included in the farm bill as they will have the biggest, most immediate impact on producers. “We’d also like to see some continued funding for voluntary conservation programs in a new farm bill, especially with so much attention on sustainable practices,” Ayoub said. “The U.S. is lagging in research and development. China introduced 17 new genetically modified crops in the last few years. We’ve seen a big increase in private investment but most of that is on commodities we already know and use. There’s not as much investment for innovative research.”

The Supplemental Nutrition Assistance Program, SNAP, benefits take up a majority of the farm bill and that’s likely why it’s so difficult to pass a new one. It’s an important topic that garners interest from both rural and urban individuals, which is why it’s in the farm bill in the first place. “In recent years, food stamp costs saw a significant increase and so there have been a lot of debates about adjusting the farm bill in reaction to that,” Ayoub said. “SNAP has exceeded its spending limits and that’s made people wonder if there should be a limit on how much SNAP can grow.”

Much like previous years, Congress gave themselves an extension for writing a new farm bill. They have until September 30, 2025. In doing this, several previously funded programs became orphans. While that doesn’t necessarily mean they’ll shut down once their current funds run out, it does mean they can’t begin new projects until they find a new home in a bill that allocates them money.  “There’s a lot of risk and uncertainty in farming to begin with but then you add in an outdated safety net and the possibility of increased taxes for 2025 income, everything just begins to compound, and it can be scary,” Ayoub said. “At the end of the day, AFBF believes an updated farm bill and tax relief for farmers and ranchers nationwide will provide certainty in a time when the farm economy has hit a sort of rut.”

For more information about the American Relief Act of 2025, orphan programs and the Farm Bill extension, click this link.