WASHINGTON — The U.S. House on Thursday passed a budget reconciliation bill that contains agriculture programs typically included in a farm bill.
The bill, backed by President Donald Trump, passed the House on a 218-214 vote.
The 2018 farm bill was signed in December 2018 and first expired on Sept. 30, 2023. After a couple extensions, it now is set again to expire on Sept. 30, 2025. Many of the provisions typically included in a farm bill made it into the budget reconciliation package.
Budget reconciliation is a legislative process Congress designed to move certain budget-related bills without the 60-vote threshold to end a filibuster, instead allowing it to move on a simple majority vote. It's a more partisan process than typical, requiring cooperation only from the majority party. No Democrats voted for the bill, in either the House or the Senate, with many citing cuts to nutrition programs — which made up more than three quarters of 2018 farm bill spending — and Congressional Budget Office expectations that the bill will increase the national debt as reasons for their opposition.
U.S. Sen. John Hoeven, R-N.D., in a statement said the bill — dubbed the "One Big Beautiful Bill" — includes the "heart and soul" of a farm bill. He said provisions in the bill include increased reference prices for Agriculture Risk Coverage and Price Loss Coverage, along with built-in future reference price increases; increased premium support for individual-based crop insurance coverage and enhanced supplemental coverage option; an extension of the sugar program through 2031 and an increase in the sugar loan rate; and improvements to the Livestock Indemnity Program and Livestock Forage Program. Rep. Julie Fedorchak, R-N.D., added that the bill permanently sets the death tax exemption to $15 million or $30 million for those married filing jointly.
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American Farm Bureau Federation President Zippy Duvall in a statement said the legislation "will bring certainty to America's farmers and ranchers" by modernizing safety net programs and making tax provisions permanent.
“More than half of farmers are losing money, so an increase in reference prices is desperately needed, and tax tools will help farmers and ranchers plan for the next season and the next generation," he said. “Lawmakers took a big step toward ensuring America’s farmers and ranchers can continue to keep pantries filled for America’s families.”
Many ag groups praised the passage of the bill. The National Oilseed Processors Association, American Soybean Association and American Coalition for Ethanol all touted improvements to the 45Z Clean Fuel Production Credit, including limiting eligibility for the 45Z credit to feedstocks grown and produced in North America. The move disqualifies imports such as Chinese used cooking oil and foreign tallow from receiving U.S. clean fuel tax incentives, helping ensure a level playing field for American-grown oilseeds like soy and canola.
The groups also said the legislation removes the Indirect Land Use Change penalty, which relates to theoretical consequences of releasing more carbon emissions due to land-use changes caused by increased growing of crops for ethanol or biodiesel production, and restores transferability of the credit.
Along with increasing reference prices and support for crop insurance, the National Association of Wheat Growers also applauded the bill's increase in funding for agricultural trade promotion programs.
The Fertilizer Institute celebrated a number of tax provisions, like making the 20% deduction for pass-through business income permanent, full expensing of the research and development tax credit and qualified production property and interest deductions, exclusion of interest on loans for rural or agricultural real property, increased manufacturing investment credit, and increased expensing limits for tangible assets, along making the Opportunity Zone program for rural communities permanent and increasing funding for specialty crop block grants.
However, not all ag groups gave unbridled support to the bill. North Dakota Farmers Union President Mark Watne called the budget reconciliation package “a mixed bag,” saying some things will strengthen the farm safety net and improve farm programs and tax provisions that impact agriculture and farmer-owned cooperatives. However, Watne said federal funding cuts to programs such as the Supplemental Nutrition Assistance Program run counterintuitive to farmers and ranchers who are in the business of feeding people.
Watne criticized using reconciliation to pass programs historically included in a farm bill as a "dangerous precedent" that circumvented regular order.
“There was less opportunity to debate the merits and challenges of programs and draft bipartisan legislation that fits the needs of urban and rural voters as the farm bill is more than just farm policy. It is a food security act for our nation,” Watne said.
“There are meaningful wins in this legislation,” he said. “But you can have wins that cause the future to be challenging, especially when farm programs are crafted without rural-urban coalitions and become partisan.”