WASHINGTON—As congressional Republicans worked on their massive tax and spending package earlier this summer, much of the attention was on the proposed extension of the 2017 tax law and changes affecting Medicaid and nutrition assistance.

The One Big, Beautiful Bill Act — which President Donald Trump signed into law on July 4 — maintains the tax breaks, imposes a federal work requirement for Medicaid recipients, and places a cost share on states for the Supplemental Nutrition Assistance Program, but it also delivers a significant update to agriculture programs.

Farmers and other producers called on Congress to authorize changes to existing agriculture programs in the lead-up to the 2018 farm bill’s original expiration in September 2023. The U.S. Senate and House of Representatives have been unable to pass a new farm bill, and instead extended the standing law on two occasions.

“We could have tweaked the 2018 farm bill very easily several years ago,” Sen. John Boozman, R-Ark., explained.

“Because of inflation, that’s what changed everything. The financial part of the farm bill became very expensive, and it was just always a challenge to come up with the dollars that we needed.”

The Senate and House approved the One Big, Beautiful Bill Act without Democratic support. All six members of Arkansas’ congressional delegation, who are Republicans, backed the measure.

Boozman, of Rogers, led the Senate effort drafting the agriculture and nutrition language of the legislative package. Boozman wields the gavel on the Senate Agriculture, Nutrition and Forestry Committee, which has jurisdiction over matters involving SNAP, as well as farms, livestock and rural development.

According to the nonpartisan Congressional Budget Office, the agriculture portion of the statute will increase federal spending for agricultural financial aid, crop insurance, disaster assistance and other rural programs by $65.7 billion over the next 10 years.

The Senate was able to approve these changes in the tax and spending package as the language changes government deficits and revenues. The Senate can approve legislation addressing budgetary matters with a simple 51-vote majority rather than the 60 votes necessary for most bills.

The House can pass legislation with a simple majority vote.

“The reason we were able to do it this time was Congress realized how difficult it is in the ag economy right now,” Boozman said. “With very, very high input costs and very low commodity prices, it costs more to produce a crop than you can sell it for.”

One of the most significant changes involves adjustments to reference prices. The law raises reference prices for covered commodities, such as soybeans and rice, between 10.1% and 20.7% with subsequent 0.5% increases starting in 2031.

Farmers have faced increased financial pressure in recent years because of stagnant reference prices, as well as high inflation and rising input costs. According to the U.S. Department of Agriculture, net farm income declined from $228.4 billion in 2022 to $163.1 billion in 2024.

“It’s sad, but the last two years have been some of the biggest drops in agriculture income in agriculture history,” Boozman said.

The reference prices are the basis for risk and price loss coverage programs, which producers utilize when revenues and crop prices fail to reach certain levels. Farmers typically have to sign up for these programs by mid-March, but the law retroactively applies the reference price changes to the current crop year.

Will Maples, an associate professor with Mississippi State University’s Department of Agricultural Economics, said changing the reference prices will provide a “more solid safety net for producers.” Congress has not increased reference prices since the 2014 farm bill, which federal lawmakers drafted using 2012 agriculture data.

“Producers have been at a point where the cost of production has far outpaced prices for their commodities,” he said. “Increased reference prices is one of the biggest things they’ve been asking for in this new bill.”

Jarrod Yates, executive vice president of the Arkansas Farm Bureau, has heard multiple stories from Arkansas farmers regarding financial hardships. In an interview with the Arkansas Democrat-Gazette, he said row crop producers have been growing “some of the best crops in our state’s history,” but these farmers are struggling to maintain their operations.

“The job that farmers are doing on the farm cannot be much better, but the price they’re receiving for such a great product is so minimal that they’re not able to make a profit and cover their costs,” he said. “The things they can control, they are controlling those very well. The things they can’t control are causing the issues for them.”

A problem with these programs, however, is the timing of payments to producers. While the law updates programs for the current crop year, farmers may not receive any payments reflecting these changes until the fall of 2026 at the earliest.

Unless Congress approves changes affecting these payments, Yates said Congress should consider providing farmers with economic assistance before the end of the calendar year. The Senate and House agreed last December to provide farmers and producers with $31 billion in economic and disaster relief in light of difficult recent crop years.

“A lot of farmers are going to be making decisions again after harvest about buying seed and preparing for the next crop year, and all of those financial decisions are going to be tough to make without some assistance between now and the end of the year,” he said.

Boozman said he isn’t sure yet if Congress needs to approve ad hoc assistance for farmers, but he noted 2025 “isn’t shaping up to be a very good year at all” for American crop production.

The law additionally updates crop insurance programs with a boost to beginning farmer and rancher benefits. Boozman touted a provision launching a pilot insurance program for poultry growers; the Arkansan and Sen. Chris Coons, D-Del., held a roundtable with Delaware poultry leaders in September 2023 regarding risks facing the poultry and egg industries.

“When they have drought and extreme heat, their utility costs increase,” Boozman said. “We’re just really recognizing all sectors of agriculture need a safety net, and, again, we were able to step up and provide that.”

The One Big, Beautiful Bill Act did not address every title of a traditional farm bill. Boozman and other congressional agriculture leaders have discussed the need for a “skinny farm bill” covering unresolved issues, such as rural development and limits in Department of Agriculture loan programs.

During an Aug. 5 appearance at Minnesota Farmfest, Minnesota Sen. Amy Klobuchar — the Senate Agriculture Committee’s top Democratic member — expressed optimism that Congress could approve a bipartisan farm bill later this year despite Democrats’ reservations about how their Republican colleagues handled the tax and spending package.

“I think there’s hope for that because there’s still other work that we have to do,” she said. “I will acknowledge some of the things that I supported were in that budget bill.”

Beyond another legislative package, Maples said he wants to see if the Trump administration or Congress considers action on agricultural trade following the president’s tariff policies on imported goods. Trump has promised and imposed these taxes on foreign-produced items, resulting in retaliatory tariffs on American goods and agricultural products.

During the first Trump presidency, the Department of Agriculture provided producers with billions of dollars in financial assistance in response to other countries placing tariffs on American crops, hogs and dairy.

Maples noted the Trump administration’s recent decision to postpone tariffs on China leaves unanswered questions. The United States and China were prepared to impose sizeable tariffs on each other last week before both sides agreed to delay any action until mid-November.

“Might we see these types of payments again if we don’t get a deal worked out with China anytime soon?” he asked. “That’s the next thing on my radar.”

The Trump administration is administering its trade policies as the United States’ position as an exporting country of agricultural products continues to erode. The Department of Agriculture previously forecast the United States will have a $49.5 billion agriculture trade deficit for the current fiscal year, which ends Sept. 30.

The United States ended fiscal 2024 with an agriculture trade deficit of $31.8 billion and fiscal 2023 with a $17.2 billion deficit.

“We’ve got to find new markets. This is something we really haven’t created in the last several years so that we can sell our products overseas,” Boozman said. “These are things we have to turn around.”

Click here to read the story on the Arkansas Democrat-Gazette website.