Reviewing the House Agriculture Committee’s Reconciliation Bill

By Jonathan Coppess, Gary Schnitkey, Nick Paulson, Bruce Sherrick, and Carl Zulauf

Budget reconciliation has begun in the House of Representatives, with multiple committees releasing text and holding business meetings to mark-up the legislation. As part of that process the House Agriculture Committee released legislative text on Monday, May 12, 2025, and began its mark-up on Tuesday, May 13, 2025 (House Agriculture Committee, Business Meeting; Yarrow, May 12, 2025). This article provides an initial overview of its provisions.  Further analysis will be provided as more information becomes available, including official information from the Congressional Budget Office (CBO) on changes in Federal outlays associated with this proposed legislation.

Background

The House and Senate agreed to the concurrent budget resolution on April 10, 2025, which operates as the agreement between the chambers on the budget for fiscal year 2025 (already underway) and setting budget levels for the following 9 years (FY2026-2034) (Congress.gov, History: H. Con. Res. 14). The budget resolution included instructions, known as reconciliation instructions, to committees requiring changes in spending from the programs in their jurisdiction.  The instructions begin what is known as the budget reconciliation process, which requires omnibus legislation enacted into law that achieves the instructions (farmdoc daily, March 13, 2025). For the House Agriculture Committee, the instruction was to reduce spending by $230 billion over the 10-year budget window (H. Con. Res. 14). In a highly unusual move, the House Agriculture Committee is attempting to include legislation beyond its instruction that would reauthorize and change much of what would normally be enacted in the Farm Bill. The discussion below provides an overview of this effort in the House Agriculture Committee.

Discussion

The House Agriculture Reconciliation Bill seeks to increase Federal support to farmers through changes to the commodity title and crop insurance programs, as well as other funding and policy changes. The House Agriculture Committee seeks to pay for these increases—as well as to reduce spending from the agriculture budget by $230 billion as instructed—by making substantial reductions to the Supplemental Nutrition Assistance Program (SNAP) (Yarrow, May 13, 2025; Folley, May 13, 2025). SNAP provides direct assistance to low-income families and individuals to help them purchase food. The proposed changes include the following.

(1) Supplemental Nutrition Assistance Program (SNAP)

Covering the first 13 pages of the 97-page bill, the SNAP provisions largely consist of modifications to existing work requirements and other program eligibility provisions. These generally amount to increased documentation which will likely result in fewer people participating in the program, thereby reducing projected spending. Other provisions would shift some of the program costs to individual states using a formula built on error rates such that states with higher error rates must pay for more of the program benefit costs. Press reports suggest that these changes will reduce Federal outlays on SNAP by over $300 billion over 10 fiscal years, which is at least $70 billion more than the reconciliation instruction (Yarrow, May 13, 2025; Folley, May 13, 2025). The additional reductions to SNAP are offsets for the increases to commodity title, crop insurance, and other Farm Bill programs with mandatory funding.

(2) Statutory Reference Price Increases and Other Farm Program Changes

As it did last year, the House Agricultural Committee has prioritized increasing statutory reference prices for all covered commodities, but by different levels (farmdoc daily, May 16, 2024; May 21, 2024; May 29, 2024). As written, the higher reference prices would apply beginning with the 2025 crop year being planted now, and for which farmers already made program decisions in April. One new component of this proposal is that beginning with the 2031 crop year, the House would increase the statutory reference price by 0.5% each crop year up to a maximum of 115% of the revised statutory reference price (see Table 1). Note that last year, CBO projected that the initial increases would cost $35 billion over 10 years (see, CBO, August 2, 2024; farmdoc daily, August 8, 2024). The additional increases beginning with the 2031 crop year would add further costs; moreover, the costs of any increases could be higher if lower commodity price projections are used to score them.

Further reusing the legislation from last year’s House Farm Bill, the bill increases the payment triggers for the Agriculture Risk Coverage, county option (ARC-CO) program from 86% of the benchmark revenue to 90%, while expanding the payment rate cap from 10% to 12.5% of the benchmark. Last year, CBO scored these same changes as costing $9.8 billion over 10 years.

In addition, the bill also includes other increases to farm assistance.  Loan rates are increased 10% for all loan commodities (upland cotton loan rate increases to a fixed $0.55 per pound). The dairy margin coverage program, supplemental disaster assistance programs, and the sugar program also have changes that increase assistance.

Finally, the bill proposes adding up to 30 million base acres to the programs, allocated based on a formula using the average acres planted in the previous five years.

(3) Farm Program Payment Limits and Payment Loopholes

The House Agriculture Reconciliation bill proposes increasing farm program payment limits from $125,000 to $155,000 (includes a crop specific limit of $155,000 for peanuts). The proposed bill retains the adjusted gross income (AGI) restriction on receiving payments ($900,000 on a three-year rolling average basis), while adding a waiver for any person or legal entity if 75% of the average gross income comes from farming, ranching, or silviculture activities.

In addition to payment limitation increases, the bill would create new exemptions from the limitations to any qualified pass-through entities (e.g., limited liability companies (LLCs), general partnerships, S corporations and partnerships). Such entities can effectively receive unlimited payments, or payments limited only by the number of persons or legal entities that own the qualified pass-through entity. The qualified pass-through entity exemptions are also applied to the “actively engaged in farming” requirement, which also has the effect of increasing payments to qualifying operations.

(4) Crop Insurance

For crop insurance, the House Agriculture Reconciliation bill proposes keeping the highest level at 85% for individual coverage and at 95% for area coverage, while adding a top coverage level of 90% for coverage aggregated across multiple commodities. Coverage for Supplemental Coverage Option (SCO) policies is increased from 86% to 90%. The bill also increases premium subsidy levels across the different coverage levels for basic and optional land units (see Table 2). The subsidy rates are higher at lower levels of coverage.  The largest increase in premium subsidy, however, is for SCO. It is difficult to know how much this will cost, but last year CBO estimated the increase in SCO subsidies would cost $2 billion over 10 years. Coupled with the increased coverage level, increasing premium subsidy for SCO raises many questions about the consequences for crop insurance and the farmers that rely on it (farmdoc daily, June 4, 2024; June 13, 2024). The bill also increases the additional premium subsidies that are available to veteran farmers and beginning farmers and ranchers, as well as increasing the time they qualify as beginning from 5 to 10 years.

Another provision for crop insurance increases the Administrative and Operating (A&O) subsidies to insurance companies for policies written in high-risk states with high loss ratios. This increase in taxpayer funds used to insure crops in high risk areas is likely a response to concerns that crop insurance companies were seeking to exit the insurance business in places like western Texas because of the huge indemnities and losses in recent years (Brasher, December 4, 2024; Schechinger, May 23, 2024). CBO estimated this to cost $1.5 billion when the same provision was included in the 2024 House Farm Bill.

(5) Conservation

Also similar to the 2024 House Farm Bill, the reconciliation bill rescinds all unobligated funds for conservation programs from the Inflation Reduction Act (IRA) of 2022 and uses the savings to increase the authorized baseline funding levels in the statute for those conservation programs. This change results in increased spending for these conservation programs beyond the IRA’s authorization end date (FY2031). Over time, the temporary increases from the IRA that peak next fiscal year would be traded for long-term increases to the program authorizations that will be continued in perpetuity (farmdoc daily, August 15, 2024; October 10, 2024). Table 3 illustrates the increased authorizations and the estimated additional baseline.

(6) Other Changes

Finally, the reconciliation bill includes a variety of funding for programs that received mandatory funding but lacked baseline and have been left in a state of uncertainty during the most recent extension (Monke, December 26, 2024). This group includes certain research programs, like the Foundation for Food and Agricultural Research (FFAR) which would receive a $37 million infusion of funds from the Commodity Credit Corporation. Also included are the Market Access Program (MAP), at $400 million for each of fiscal years 2026 to 2031, while the Foreign Market Development (FMD) program would receive $69 million each fiscal year, the de la Garza Emerging Markets Program would receive $8 million each fiscal year, and the Technical Assistance for Specialty Crops would receive $9 million each fiscal year.

Concluding Thoughts

The legislative text released Monday and being considered by the House Agriculture Committee represents the first step in a complicated, challenging process. If it is approved by the House Agriculture Committee, it will be included in a single, omnibus bill along with the legislation approved by other committees receiving reconciliation instructions in the budget resolution. The Senate will also need to consider reconciliation bills, but committees have different reconciliation instructions; for example, the Senate Committee on Agriculture, Nutrition, and Forestry received an instruction to reduce spending by $1 billion. Reconciliation in the Senate is subject to special procedures, including what is known as the Byrd Rule, which prevents including anything in the reconciliation omnibus bill that is extraneous to the budget outcomes. If both chambers pass their respective reconciliation bills, they will need to conference them and then pass a single bill with the same legislative text that will go to the President to sign into law. While the House Agriculture Reconciliation bill is merely the first step in a long and difficult process, the changes it proposes are consequential for agricultural and food policy, as well as rural communities. Including significant pieces of the Farm Bill in reconciliation raises complicated and problematic questions about the future of the Farm Bill as well. Further analysis awaits more information on the proposed changes and progress in the process.

Reviewing the House Agriculture Committee’s Reconciliation Bill was originally published by Farmdoc.