Congressional lawmakers late Friday approved an extension of the farm bill with $10 billion in economic aid for farmers, part of a spending agreement that narrowly avoided a government shutdown.
The House passed the funding deal — and the farm bill extension — after a raucous week of partisan infighting around outside provisions that included wage hikes for congressional members. President Joe Biden signed the legislation shortly after the Senate approved the deal Friday evening.
The bill, which extends government funding through March 14, faced significant hurdles after President-elect Donald Trump expressed opposition to what was touted as a bipartisan spending deal earlier in the week. Billionaire Elon Musk — and Trump’s pick to oversee a newly created department dedicated to cutting government spending — also disapproved via X, formerly known as Twitter.
The final spending bill ultimately removed pay raises and other provisions that Trump and Musk opposed, additionally striking a proposal to allow for E15 ethanol fuel sales year-round. It still includes over $100 billion for disaster aid requested by President Joe Biden, with $10 billion to be set aside for one-time farm economic payments.
“For many farmers, the disaster relief provided … will be the difference between planting for another year or going out of business,” Zippy Duvall, president of the American Farm Bureau Federation, said in a statement. “The farm bill extension also offers a short reprieve, and gives lawmakers some breathing room to pass a modernized farm bill that will provide risk management support.”
What a farm bill extension means — now and for 2025
This is the second extension of the farm bill, which is renegotiated every five years. The giant spending package oversees farm programs and the Supplemental Nutrition Assistance Program, and was last approved in 2018.
The deal for a one-year farm bill extension comes a little more than a week before key farm safety net programs would start to expire and revert back to Depression-era law, which experts warned would radically raise food prices and upend agricultural operations.
Farm groups lobbied hard for lawmakers to negotiate a new farm bill this year to give producers certainty in the face of a declining agricultural economy. Tumbling crop prices and livestock shortages have pressured margins for farmers and agribusinesses alike, with layoffs and other financial cutbacks roiling rural communities.
However, partisan divides over funding for climate and anti-hunger programs have stalled negotiations, and a new Congress next year could mean months before an agreement is finalized. Congress will need to reform agriculture committees, and the makeup of these panels could determine the shape of a new bill.
“The reorganization in the House always takes some time, there’s some delay until the committees are actually appointed,” House Agriculture Chairman Glenn “GT” Thompson said earlier this year, responding to a question about challenges Congress would face if it had to approve a new farm bill in 2025.
Thompson said in a statement on Tuesday that he hopes to pass a farm bill next year that addresses the ongoing decline in farm income.
“I hope to move quickly to enact a five-year farm bill that aligns the farm safety net with the needs of producers, among many other policies, to minimize the need for annual economic aid,” he said.
Beyond a delay in passing the bill, the final text could also look much different than current proposals with Republicans set to control all three legislative branches. Critically, around $20 billion in additional funding for the farm bill from the Inflation Reduction Act could disappear as Trump vows to roll back unspent dollars under Biden’s flagship bill.
Democrats and Republicans had hoped to roll in the additional $20 billion into farm bill baseline funding, which would have ensured the funding would be included in subsequent farm bills. However, the two parties could not agree whether the funds should be dedicated to climate-smart agriculture or be used to support other programs.
“We are deeply discouraged by the political decision to limit countless farmers’ ability to build both their productivity and resilience against future disasters,” Mike Lavender, policy director of the National Sustainable Agriculture Coalition, said in a statement. “Beginning in early 2025, Agriculture Committee and Congressional leaders must prioritize a bipartisan farm bill reauthorization that recoups the remaining fraction of the conservation investment left on the table by this deal.”
Inside the farm economic payments
In the absence of a new farm bill, agricultural producers demanded that an extension include economic relief in the face of lower commodity prices, reduced government funding and other hurdles.
The extension ultimately includes $10 billion in one-time economic payments for farmers as well as an additional $20 billion for producers to recover from drought, hurricanes and other natural disasters over the last two years. Critically, farms can receive aid even if they do not have access to federal crop insurance programs.
Farms can qualify for aid if the gross return for an eligible commodity is less than the expected cost of production, according to the bill. The amount of assistance provided will be calculated by multiplying a farm’s economic loss by the number of acres, with the payment equaling 26% of that final number. Acres can include 50% of land that could not be planted during the 2024 crop year due to drought, floods or other natural disasters.
The U.S. Department of Agriculture will have 90 days from the enactment of the bill to make the payments. Payments will be capped at $125,000 for farms whose agricultural operations make up less than 75% of average gross income from the 2020 through 2022 tax years. Farms whose gross income is above 75% for those years can receive a maximum of $250,000.
Farm groups say the financial assistance is vital for producers to remain cash positive and secure loans in a cautious lending environment. Many banks have tightened lending policies and made it harder for farms to access loans when they need it most.
“Anyone who views delivering economic assistance to farmers as a cost to our nation is severely misguided,” Russell Boening, president of Texas Farm Bureau, wrote in an op-ed earlier in the week. “This must be regarded as a necessary investment in the future of our food security.