Agriculture Highlights from the One Big Beautiful Bill Act

Early in July, the Budget Reconciliation Bill, called the One Big Beautiful Bill Act,  was passed by both the House and the Senate, and shortly thereafter, it was signed into law by President Trump. While controversial in some of its line items, the bill did include a section on agriculture and outlined some changes to be made in the industry. Several of these changes were used to update the farm safety net programs for upcoming crop years. Let’s take a look at some of the adjustments.

– Reference Prices

– ARC and PLC Changes

– Base Acre Voluntary Updates

– Marketing Loan Rates

– Beginning Farmer and Rancher Changes

– SCO Changes

– Premium Support and Administrative Operating Expenses

– The Poultry Insurance Pilot Program

– Conservation Program Changes

The first adjustment we will examine is the effective reference price. The recent Budget Reconciliation Bill adjusts the reference prices, which are estimated to increase by 15% effectively from 2025 to 2031. Additionally, the reference price will be increased annually by a multiplier of 1.005 starting in crop year 2031.

The reference price increases by a small margin each year after 2031, to reflect long-term market trends. This increase, however, was capped at 113% of the original value to prevent unchecked expansion. For example, with corn’s new reference price of $4.10, the maximum amount the reference price could reach with this introduced multiplier would be $4.63.

ARC (Agriculture Risk Coverage) and PLC ( Price Loss Coverage) are also receiving a few changes starting in the 2025 crop year. To begin with, for the 2025 crop year, landowners will receive the higher of ARC or PLC payment regardless of their current program election. In addition, the maximum payment for the ARC program in crop year 2025 has been expanded to 12% of benchmark revenue, up from the current 10%. The Big Beautiful Bill Act also decreased the deductible from 14% (86% coverage) to 10% (90% coverage). This larger maximum payment and higher coverage will provide slightly larger payments when revenue is down that trigger sooner. Arc is also losing its limitation on not functioning with SCO.

For 2025 producers won’t need to worry about choosing between ARC and PLC, as they’ll automatically receive whichever provides the higher payment. However, selections look like they will be back in crop year 2026, so producers should not get too comfy with not making a selection.   Additionally, one of the challenges of choosing ARC has been removed with the decision to allow SCO to pair with it. The SCO program has also received several other improvements, which we will cover later.

To address concerns from young, beginning, and small farmers without base, or for farmers with an insufficient base, the One Big Beautiful Bill Act provides up to 30 million new base acres nationwide, based on recent planting history (2019–2023) for both covered and certain non-covered commodities. These new base acres are expected to be allocated proportionally among covered crops based on planting history. The base acre calculations will reconcile planted/history averages minus current base acres, with USDA applying proportional reductions if limits are exceeded. In any event, when these changes become effective, payments to farmers will increase.

Base acres are a system where historical crop-specific acres are averaged together to show the base acres of a farm. These base acres are then utilized to determine what acreage of a farm is eligible for FSA payment programs, such as PLC and ARC.  The base acreage of a farm may differ from the current year’s acreage, as the updates to base acreage are typically rare occurrences. Approximately 242 million base acres were signed up for ARC and PLC in 2024. The increase in base acres allows for greater eligibility for commodity support.

This can leave some farms with base acres that vary wildly from actively planted acres, and with the timeframes involved, the base acres may be locked that way for years.

Nonrecourse Marketing Assistance Loans were adjusted for crop years 2026-2031. Their rates were increased to the amounts listed in the table to the right. In general, rates were raised across the board. In the case of Upland Cotton, while still raising it, the change simplifies its loan rate to just $0.55 per pound instead of using the formula below, included in the Agricultural Act of 2014:

In the case of base quality of upland cotton, for each of the 2014 through 2018 crop years, the simple average of the adjusted prevailing world price for the 2 immediately preceding marketing years, as determined by the Secretary and announced October 1 preceding the next domestic plantings, but in no case less than $0.45 per pound or more than $0.52 per pound.

Do note that these updated marketing loan rates are for the 2026 and later crop years, meaning the marketing loans available for the 2025 crop will continue to be at the existing rates.

Previously, to qualify as a beginning farmer and rancher (BFR), a producer could not have actively operated and managed a farm or ranch anywhere with an insurable interest in any crop or livestock for more than five crop years. Those five crop years did have some exceptions, which you can find in the RMA’s fact sheet about Beginning Farmer and Rancher Benefits for Crop Insurance.

New premium subsidies:

• +10% for up to 10 crop years
• +5% for first 2 years
• +3% for year 3
• +1% for year 4

The Supplemental Coverage Option (SCO) endorsement also received some major updates in this bill. The coverage level will increase from 86% up to 90% in crop year 2027. While in crop year 2026 premium subsidy increased from 65% to 80%. Additionally, producers can now purchase the SCO endorsement even when their base acres are enrolled in the ARC program. However, SCO and the Stacked income protection plan (STAX) remain incompatible on the same acres.

The USDA announced in a recent article that premium support will extend beyond just SCO coverage for crop year 2026. The programs listed below will also be receiving the 80% premium subsidy. These programs include Enhanced Coverage Option (ECO), Margin Coverage Option (MCO), Hurricane Insurance Protection Wind Index (HIP-WI), and the Fire Insurance Protection Smoke Index (FIP-SI).

Combining an increase in coverage with a whopping 15% subsidy increase makes SCO more affordable than ever. With the Limitation that SCO cannot work with ARC base acres removed,  SCO can now be utilized by a larger number of producers. Supplemental Coverage Option is an area plan, which means it does not trigger based solely on individual farm performance, but on the entire county’s performance. As such, even though SCO is now more affordable, it does not mean that it is going to be the best option for every scenario. Make sure to talk with one of our expert crop insurance agents to see if SCO would work for your operation’s risk management strategy.

While SCO has been the highlight, the USDA is extending that support to several other programs as well, making them more affordable. Extending the 80% premium subsidy to additional products gives producers more affordable options and makes it easier to build an effective risk management strategy.

The RMA has explored poultry insurance programs in the past, but earlier efforts fell short and were never fully implemented. Several examples of exploring poultry insurance products include an investigation into insuring commercial poultry production, a program development attempt for poultry business interruptions, and a further investigation into catastrophic disease interruptions, which stemmed from the business interruptions investigation.

Now, a pilot program for poultry insurance is set to be implemented. This program is intended to be an index-based insurance policy for extreme weather-related risks in increased utility costs associated with poultry production. For example, after a large hurricane, the cost of natural gas may increase. This program is being implemented specifically for contract poultry growers.

Aside from the other changes we have already discussed, Congress added additional funding to four different conservation programs. They set up the funding to increase incrementally over the next few years, out to 2031. Some programs see frequent and significant increases, while others only receive minor adjustments from year to year.

The Agricultural Conservation Easement Program (ACEP) was originally funded at 450 million by the end of 2023. (see the Food Security Act of 1985, sec 1241 page 110.) Here’s how its funding is expected to grow under the new Big Beautiful Bill.

In total, the program will go from 450 million to 700 million by 2031, increasing by a total of 250 million, a roughly 55% increase in total funding.

ACEP is a program designed to protect agricultural viability and related conservation values of eligible land by limiting the nonagricultural uses that could potentially negatively affect agricultural uses and conservation values. It works to enact this through two components: agricultural land easements and wetland reserve easements.

The Environmental Quality Incentives Program, or EQIP is also set to receive some increases from its starting point of $2,025,000,000, which you can see through the table below. Its original numbers can be found directly after the ACEP numbers in the Food Security Act of 1985

By 2031, this program will have increased by $1,230,000,000, amounting to an approximate 61% increase in funding.

EQIP is a program that looks to assist farmers, ranchers, and forest landowners in integrating conservation into working lands. While some of the available practices and practice standards can vary by state, NRCS tries to work with each producer to help develop a conservation plan for their location. You can learn more about EQIP from the NRCS article here.

The Conservation Stewardship Program, or CSP, will be increasing from its base funding at one billion dollars in 2023 by the following amounts. The original numbers for CSP can be found directly after the EQIP numbers in the Food Security Act of 1985.

by 2031, the CSP will have increased by 375 million dollars for an approximate 37% increase in total funding.

The Conservation Stewardship Program looks to help build custom plans to work towards improving grazing conditions, increasing crop resiliency, developing wildlife habitats, and more. They additionally try to offer technical and financial assistance to help solve these problems where they can.

The Regional Conservation Partnership Program, or RCPP started at 300 million dollars for its funding before the Big Beautiful Bill. You can see its growth schedule set by the government in the table below. Unlike the other three conservation programs, the RCPP original funding numbers are found in Sec 1271D on page 154 of the Food Security Act of 1985. Another difference from its companion programs, this program was not set up with an incrementally increasing amount at inception, and even with the Big Beautiful Bill, it will only increase once more between 2026 and 2031.

In total, by 2031, the program will have increased by $150,000,000 for a 50% increase in total funding.

The RCPP program splits its work into two categories of projects: RCPP classic and RCPP alternative Funding Arrangements. The classic projects use NRCS contracts and easements with producers, landowners, and communities in collaboration with project partners. The alternative funding arrangement projects work instead through funding provided to partners to support conservation activities. More information can be found on the NRCS Regional Conservation Partnership Program Page.