Do the Changes to the Farm Safety Net Make You Safer?

The House-passed budget bill, known as the “One Big Beautiful Bill Act,” includes sweeping changes to agriculture policy that supporters say are designed to increase the safety net for farmers. This legislation is important because it has the potential to take the place of the Farm Bill that Congress is supposed to be working on to replace the one that expired two years ago.

Because these changes can especially affect rural communities, today, we’ll take a look at what’s in the legislation, consider for whom the safety net works, and what it tells us about Congress’s focus when it comes to farm policy.

Recalibrating the Farm Safety Net

Title I of the bill, which addresses commodity programs, introduces several changes that dramatically expand the size and scope of farm subsidies.

Elimination of Payment Limits and Income Caps

The legislation lifts the existing cap on commodity payments and eliminates the $900,000 Adjusted Gross Income (AGI) eligibility limit. Previously ineligible corporate farming operations with annual earnings well above $1 million would now qualify for full subsidy payments, and high-net-worth individuals would be able to collect unlimited subsidies. (“Equitable Treatment of Certain Entities” amends portions of Section 1001 of the Food Security Act of 1985. Page 40, Line 19 of OBBBA.)

Expanded Eligibility via Pass-Through Entities

Adjustments to rules on pass-through entities broadens the pool of those eligible to receive commodity payments. As structured, this could allow every individual member of a farm-related company, including those living in cities and with no hands-on role in farming, to collect payments tied to the business’s farming operations. (“Equitable Treatment of Certain Entities” amends portions of Section 1001 of the Food Security Act of 1985. Page 40, Line 19 of OBBBA)

Analysis:

The elimination of payment limits and income caps, along with expanded eligibility for payment to pass-through entities, has the potential to direct taxpayer dollars to high-income individuals and people residing in urban areas who are not actively involved in farming or ranching. This was the reason why there was means testing and pass-through limits in the past. However, the current majority in Congress believes this is unfair because it limits support to certain individuals. You can read more about their position on “Means Testing” and “Modernizing Payment Limitations” in this informational piece from the House Committee on Agriculture. (Downloaded May 30, 2025.)

Increased Reference Prices and Base Acreage Expansion

Key commodities are those crops considered to be critical due to their fundamental roles in food production, animal feed, industrial uses, and global trade. To ensure that farmers continue to grow these crops, the U.S. sets a floor price that triggers subsidy payments if their prices drop too low. With this bill, Congress proposes increasing the reference prices for many crops by 10 to 20%. (Find the complete list on page 28 of the OBBBA.)

Key Commodities include:
wheat, oats, barley, corn, grain sorghum, rice, soybeans, sunflower seed, rapeseed, canola, safflower, flaxseed, mustard seed, crambe and sesame seed, dry peas, lentils, small chickpeas, and large chickpeas.

The bill also provides producers a one-time opportunity to update or expand their base acreage. Their base acreage determines eligibility for subsidies under the Agriculture Risk Coverage and Price Loss Coverage programs. An increase is a boon to large landowners who acquired new farmland in recent years. It gives them access to more subsidies than smaller producers with less ability to purchase land and expand. (Included under “Safety Net” on page 30 line 2.)

Analysis

According to the USDA’s National Agricultural Statistics Service, about 40% of farms produce crops eligible for these payments, and 10% of those farms collected 74% of those payments. In addition, while we might think that farm subsidies are only paid in times of need, the price supports for cotton, rice, and peanuts would be high enough that many farmers would receive a payment every year.

According to the House Committee on Agriculture, led by Pennsylvania Republican GT Glenn, this increase in support payments is necessary because of an expected loss in Net Farm Income (NFI) in 2024. But data provided by the USDA’s Economic Research Service shows that, while NFI was down in 2024, it is expected to rebound in 2025 and “would be 44.8 percent above its 20-year average (2004–23) of $124.4 billion but 8.9 percent below 2022’s record high in inflation-adjusted dollars.

There is also an underlying philosophy behind supporting these large-scale agricultural operations: those who produce the most should receive the most support. Those who question this philosophy suggest that it creates a system where the richer get richer and the less well-off go out of business. They point out that it also creates a food system that is less resilient to supply chain disruptions, as we saw during the pandemic.

What Does This Mean in Terms of Agricultural Policy?

Since the 1920s, when the U.S. first became a primarily urban country, agriculture policy has been a balance between ensuring enough production to feed everyone in the country and supporting the people who do the work. To boost production, the Federal government has invested in research that improves the crops grown and mechanization to make production more efficient. The government has also used a combination of subsidies, price supports, and insurance programs to ensure that those raising the food stay in the business of farming. 

Over time, the result of government policy has been an increase in corporate agriculture and a reduction in the number of farms. This is not accidental. A fairly steady philosophy among Republican Secretaries of Agriculture was most clearly stated by Earl Butz, who told farmers to “Get big or get out” and “Adapt or die.” This support of big agriculture was repeated by Secretary Sonny Perdue, in 2019 when he said, “In America, the big get bigger and the small go out.“

This policy is promoted by agribusinesses that spend freely to lobby elected officials (a half billion dollars from 2019 to 2023, and more than two other industries well-known for lobbying – the defense sector and the oil and gas industry). So it’s no surprise that the “One Big Beautiful Bill Act” continues this policy by providing expansion of federal support for the largest, most profitable farms. While billed as pro-farmer, it appears that the actual beneficiaries are disproportionately wealthy operations and non-farming investors.

This emphasis on large, consolidated farms also has some downsides. Many argue that the proposed changes may make it harder for family farms and conservation-oriented operations to compete, especially if subsidies increasingly flow to already well-capitalized agribusinesses. It also pushes out smaller, family-owned operations that historically formed the economic backbone of many rural communities. As family farms disappear, so do the associated local businesses, creating a ripple effect through the rural economy. This decline in economic activity can lead to job losses, reduced tax revenues for local governments, and population decline as people leave in search of opportunities elsewhere.

But What About Our Communities?

As Don Ashford reminds us in this piece, we also lose something difficult to measure and rarely considered in the halls of Congress. We lose community with each other and the connections that make us happier and stronger.

Don writes that when the small family dairy farms fell to consolidation in Louisiana, at first they didn’t realize what they’d lost. “But after a while, we realized that one of the most meaningful losses was the loss of community, of being bound to other people by the same problems and workload, and belonging to, for the lack of a better word, a fraternity. There was commonality of purpose, and if one was in a bind, a call to a neighbor brought help. After all of the milk cows were sold, that was lost. The neighbors, for the most part, were still there, but most were working day jobs, so they were no longer available. We had all assumed different lives. So, after a while, the feeling of togetherness finally disappeared.”

He concludes with this:

“It has been said that if we do not know our history, we are subject to make the same mistakes over and over again. My history tells me that small farmers make important communities. It leads me to ask, if not now, when will be a good time to decide exactly what the point of this society really is? If profits are above people, let’s just put it out there and move on. And make no mistake the corporate goal is to make all of us consumers rather than producers.”

Kathy’s Bias

If you read my earlier piece about my bias, you’ll remember that I believe a healthy agricultural community is critical to the health of the United States. It’s a matter of national security that family farms not just survive, but thrive. When they thrive, so do our rural communities, and when rural communities thrive, it trickles UP to everyone. To me, that means that our policies as a country, especially our trade policy and our agriculture policy, should focus on what makes our producers and our rural communities more successful.

Today I’ll add to that.

One thing I didn’t mention here is the price of the changes and how we’re paying for them. Estimates are that this portion of the bill will cost $53 billion, and to date, none of that spending is covered and will simply be added to the deficit. Does that give you heartburn? Well, me too. I don’t appreciate the government using my tax dollars to add more money to the bank accounts of people who already have plenty, while leaving rural communities and family farms behind. I think our elected officials should do better. But that’s my bias.

Read More

I learned a lot about the history of the farm bill and how it works from Daniel Imhoff’s 2007 book, “Food Fight: the Citizen’s Guide to a Food and Farm Bill.” You can borrow it for free from the Internet Archive here. Just sign up for a free account, login, and start reading.

There’s also a 2012, updated version.