Tariff Revenue Could Fund Farm Aid in Farm Bill 2.0, Says Ag Committee Chairman

Congress has returned to Washington after the August recess. House Ag Committee Chair Glenn “GT” Thompson told Agri-Pulse Newsmakers he still wants to take committee action on “farm bill 2.0” in September and is eyeing including farm aid payments funded through tariff revenue.

During the conversation, some of the top issues facing agriculture this fall were discussed: Farm income, trade, ag labor reform, the USDA reorganization plan, and his priorities in “farm bill 2.0.”

Then, Callie Eideberg with the Vogel Group and Tom Sell with Combest, Sell & Associates discussed the USDA’s farm income forecast, trade, and the possibility of farm aid payments this fall.

Watch the Episode

Want to receive Newsmakers in your inbox every week? Sign up!

Read the Transcript

Please note: This transcript has not been edited.

Lydia Johnson: Welcome to Agri-Pulse Newsmakers, where we aim to take you to the heart of ag policy. I’m your host, Lydia Johnson. Our guest this week is House and Committee Chair Glenn Thompson, who joins us to discuss the Skinny farm bill and his thoughts on using tariff revenue to fund fall farm aid payments.

But first, here’s this week’s headlines. The Agriculture Department has extended the USDA reorganization comment period from August 26th to September 30th. The planned closure of a major research center in suburban Maryland, and the department’s plan to consolidate staff in five regional hubs are also drawing some opposition. USDA isn’t posting the comments it has received, but farm groups and USDA stakeholders are raising concerns about the impact the plan will have on agencies and personnel. For example, the American Farm Bureau Federation supports creating five regional hubs, but is also concerned about maintaining the ability to meet with USDA leadership. The National Council of Farmer Cooperatives wants to ensure there are enough county and regional staff to efficiently serve producers. The Environmental Protection Agency canceled the Biden era plan to reduce wastewater discharges from meat and poultry processing plants. During the announcement, EPA administrator Lee Zeldin cited impacts of facility closures to the nation’s meat supply and attendant job losses as reasons for retaining the regulatory status quo. EPA’s January 2024 proposal estimated that 16 facilities would close if EPA adopted the preferred alternative in its proposal. In the final action document, EPA said the closure or reduced capacity facilities could have significant impacts on the nation’s food supply and pricing. The Agriculture Department is lowering its forecast for farm earnings in 2025, as declines in the crop sector more than offset soaring incomes for cattle producers. Net cash farm income, a measure of producers cash flow, is forecast at $180.7 billion in 2025. That marks an increase of over $36 billion, or about 25%, over last year when adjusted for inflation, according to the forecast issued by the USDA Economic Research Service. Even with the lower numbers, both the net farm income and net cash farm income estimates are above the 20 year average, primarily due to an influx in government payments to real crop producers.USDA estimates that direct government payments to producers will surpass $40 billion this year, marking a $30 billion increase from 2024, in the largest amount since the pandemic year of 2020. USDA says farm income will increase this year, but mostly because of government payments and strong income in the livestock industry. We asked House Committee Chair Glenn Thompson his thoughts on the report in the farm economy right now.

Glenn “GT” Thompson: Well, I mean, it’s to be expected. You know, the the income is up. You know, the I think the part that compounds that is, is basically the, the actual commodity prices have been down. And and that’s the issue we need to address. And we need to address that by expanding markets and also addressing the input costs. You know, at the end of the day it’s not so important what your revenue is, is what the your net is. It’s the margin that is so important. So I wasn’t surprised by that report. It was really interesting. They also, you know, released the, you know, the trade data for the past fiscal year. And we had a pretty tough fiscal have first half the fiscal year was really may have pretty tough coming out of, October 1st. And last quarter, the Biden administration and then the whole transition time with Trump. And, you know, it was it was interesting. I mean, trade was up by 8 million metric pounds. And, which is good. But revenue was essentially flat. And part of that is, the actual, you know, it’s the input costs. It’s the headwinds that farmers are facing. So I think that’s good information, that’s great data. And really to have us focus, use that part of a root cause analysis to kind of inform, now what do we need to do? And I know the next step that we need to do is farm Bill 2.0, but it’s also labor. It’s, it’s continue to work cooperatively with, the administration on trade.

Lydia Johnson: I’m curious. We spoke earlier this week and you said that farm aid will be necessary this fall with the predicted record yields and the uncertainty around tariffs and trade. You know, I’m curious, do you think that the farm income forecast a lays a financial picture for for you to advocate for those payments?

Glenn “GT” Thompson: Yeah, I think it does. You know, I was honestly last December, I was singing a different tune. I was really hoping that, what we did, that $10 billion in economic harm would, would have been sufficient. I wasn’t going to fill in all the gaps. And and we knew that. And I think that, between, that the, the natural reason, the natural disaster assistance, you know, the, everything that we’ve done, you know, really, from what I can tell, based on the data, about a third of the losses is what is covered. So I think there’s more that we need to do. You know, food security is national security. And so I’ll be advocating, for investment. We, honestly, I look at, I don’t know how much a significant amount of money in tariffs that have been collected. I’m advocating that, just a fraction of that money would be invested, used to invest, in our farmers, to, to keep them financially stable going forward. And I think we need to be creative how we do that. The, you know, I appreciate the trade process, negotiations, the president’s using. And Jameson Greer is leading. But I would say, you know, I don’t know where we at? Over, you know, at least a $100 billion in tariff money. So, you know, a fraction that’s been collected that a fraction of that would be a great investment. And, actually in farm Bill 2.0, yeah.

Lydia Johnson: And it’s kind of a unique perspective, maybe to use that tariff money. I mean, the past, during the trade war, during the first Trump administration, the Commodity Credit Corporation was used. So, I mean, you kind of have a vision. You mentioned incorporating those payments into the farm Bill 2.0, but a vision of how it will work to realize that tariff rate.

Glenn “GT” Thompson: Yeah. Just a fraction of them, you know, you know, I think that’s just a better way, versus, you know, you know, using the Commodity Credit Corporation, which is what we’ve done in the past. And I stated early on that, you know, if if this was needed, I mean, well, over a year ago, I had made the statement, well, the let’s say the beginning of, after the election, predicting that trade would agriculture trade will once again with some be something an administration would be working on. You know, that we may face a situation like we did under Trump 45. And we will we would be prepared to with the seek to make sure it’s replenished and in a way. But I you know, I think there are some other alternatives. Why wouldn’t we keep the CC the integrity of it the way it is now so they could do what it was originally designed for.

Lydia Johnson: House Ag Committee chair Glenn Thompson is still working on passing a farm Bill 2.0 this year. We asked him if he’s still eyeing September committee action on the bill, and what he’d like to see included.

Glenn “GT” Thompson: The framework is pretty, pretty easy to start with. It says it’s taking the Farm Food National Security Act of 2024. And, all we need to do is just take out all the things that we put into law with, you know, with, the farm Bill 1.0, that, 80% of the farm bill, largest investment in the AG, safety net since 2002. And whatever remains is, will be at the core of farm Bill 2.0.Now, we need to take a fresh look at it. We have new members on the committee. We’ve been working hard with the Republican side, to get their ideas, their requests, and seeing how we can incorporate those into intent. We’ve already been doing that. You know, I put a request in to the, ranking member, Angie Craig. She’s a good friend. She has, told me that she has received the the the the priorities for the Democratic members. And, we had a discussion last night on the floor, and I really I, you know, asked, request that we get those in the next ten days. So we get, you know, we have two weeks so we can get those incorporated because I think, there are a lot of good programs that need to be reauthorized. No, we’re not under a real time crunch at this point. I know technically, the farm bill portions that weren’t reauthorized, on July 4th, you know, technically, they expire on, October 1st. But functionally, they’re all funded right through the end of the, of the calendar year. So we have time, but, but I think for, you know, giving our, you know, providing our farmers with the certainty that they need. And, let’s just call out, the, the hope that they require to, you know, the sooner that we can get, 2.0 done and across the finish line, the better.

Lydia Johnson: And I’m curious, some of the controversial, let’s say, more controversial provisions that you’re considering whether or not a legislative solution for proposition 12, you know, concerns about industrial hemp lawsuits against pesticide manufacturers. I mean, if you want to maybe break down those three, at least,

Glenn “GT” Thompson: You know, you’re spot on. They’re the ones we have, the, and we saw that for the most part, although it wasn’t, when we did the farm bill last time out of committee last Congress, I was surprised that they didn’t get a tremendous amount of discussion. So fully anticipate the save the bacon provision. Will be in farm Bill 2.0. The Supreme Court has made it very clear, that’s not something they were going to fix, that there may be an issue with interstate commerce, one state dictating agricultural practices to other states. But it was, you know, the justices, some of the, a number of the opinions clearly stated that’s Congress’s job. And they we should do our job. So we are the pesticide labeling. I mean, I really believe that we need, we need to be working with the EPA, in terms of labeling for pesticide. And then if we open this up to 50 different states, knowing the pesticide labeling, we’re going to get see, people get hurt because of the confusion, the you know, the lack of continuity in terms of, education practices, you know, to be the training requirements, the application guidelines. And so, you know, the EPA has a massive amount of scientists, most of them funded actually by the industry. So it’s, it’s a great public private partnership. And so, that and the I really believe that needs to be addressed with within the farm bill. And then, and then we’ll have the hemp discussions, you know, there’s, I think the, the, the Agriculture committee’s intent in 2018 was to address, industrial hemp food and fiber. But the way the language was, it left some unfortunately, some, wasn’t tight enough for definition. So there’s been some because a lot of businesses have been created that use, the, the use the, the hemp when it’s hot, when it has an addictive quality. That was never the intent of the agriculture Committee. Like the last farm bill, I will process and committee and we’ll let the we’ll let the committee work its will on that. And whether that’s one way or the other or some compromise in the middle that’s yet to be seen.

Lydia Johnson: And still looking at a price tag of about $8 billion over ten years

Glenn “GT” Thompson: I think a it may be a little higher if, especially if we’re going to incorporate some investments, into, you know, to deal with some of the economic issues, that are, that are farmers are, are dealing with.

Lydia Johnson: how high do you think that that could be?

Glenn “GT” Thompson: I, you know, I’m not sure at this point, I, I would think that, an investment of, was really pleased with, what we got for $10 billion. You know, pretty impressive support for agriculture, you know, dealt with about a third of the losses. So. And so if we can do an investment 2.0 to stimulate economic growth, you know, maybe, you know, so we’ll say with, with the farm bill, 8 to 8 to $10 billion, investments and then, maybe another, it would be wonderful to be able to replicate what we did in December.

Lydia Johnson: We’ll be right back with more Agri-Pulse Newsmakers. But first, Andrew Huneke looks at USDA s most recent farm income forecast. And this week’s AG by the numbers.

Andrew Huneke: USDA is lowering its forecast for farm earnings this year because declines in the crop sector are offsetting rising incomes for cattle producers. This chart shows net farm income and net cash farm income, adjusted for inflation from 2004 to the forecasted totals for 2025 net cash farm income is the Green line. It’s a measure of farmers cash flow. It’s projected at just under $181 billion in 2025, an increase of more than $36.5 billion from last year. Net farm income it’s the blue line. It’s a broader measure of profits. It’s forecast to just under $180 billion in 2025, which would represent a gain of nearly $49 billion from last year. For Agri-Pulse I’m Andrew Huneke.

Lydia Johnson: Welcome back. The farm income forecast released this week shows higher farm income than last year. But there’s still a lot of uncertainty in farm country, with predicted record yields and trade uncertainty. We’re joined in our panel today by Callie Eideberg with The Vogel Group and Tom Sell with Combest, Sell and Associates. Callie we’ll start with you. What are your thoughts after reviewing the farm income forecast?

Callie Eideberg: Well, it’s not a good time right now. We’re looking farmers are looking in. The entire agri economy is really facing an economic headwind. Congress has taken steps this summer to try to alleviate some of that pain, but the payments and the increase, reference prices that we saw pass in the big beautiful bill this summer are not going to go into effect until 2026. And so farmers who need immediately immediate relief now, are not finding that. If we can get some export markets opened, if we can potentially open up some new avenue for federal resources, then we could see some alleviation. But it is just a really challenging time out there.

Lydia Johnson: House Ag Committee chair GT Thompson has said that he’d like to see farm aid payments funded through tariff revenue. This fall, potentially through that farm bill 2.0 he’s looking to pass. Yeah. I’m curious, Callie, do you think securing these payments for farmers later this year is realistic? And how do you think they could be funded?

Callie Eideberg: Well, the tariff payments is really interesting. The legality of that I think, is a little up in the air. But I know Chairman Thompson is really focused on helping out farmers across the country. And so figuring out those complicated legal issues, if it’s possible, I think he and his team can make it happen. But however, you know, we did see a court rule just earlier this week or toward the end of last week that the tariffs in the first place, potentially are not legal. And so it, you know, it’s something that that the chairman and his team would have to be mindful of. Is that money going to actually be available or will it be subject to the litigation that is outside of the committee in the chairman’s control?

Lydia Johnson: Tom, I want to bring you into the conversation as well. I mean, your thoughts on those payments and what the chairman’s proposed. It’s really interesting to see his thoughts on using tariff revenue to fund those after the Commodity Credit Corporation was used to make similar payments during the first Trump administration.

Tom Sell: You know, there is a real need as as Kelly was saying. I mean, it’s kind of a best of times, worst times going on in, in, in rural America right now. We passed this unprecedented, incredible, provision to, support the title one farm safety net crop insurance, conservation, funds that are available. Trade aid funds. I mean, this the investments made in the big beautiful bill are enormous and and fantastic for the future of ag policy. They don’t just as Kelly identified. They don’t they don’t kick in for, really until bulk up until October of 2026. So more than a year away. And so we have this kind of funding hole right now. There needs to be, some very intentional plans made, one to get to get some commodities cleared out. I think we need to revamp and re-up, our food aid programs, to get some of these commodities moving. That will take some a little bit of pressure off. And then and then this idea of of additional assistance both to the infrastructure to support the infrastructure and to the growers.

Lydia Johnson: Congress is racing the clock against the government shut down this month. With everything on the docket and limited in session days, we asked Callie Eideberg if she thinks the House AG Committee will be able to take committee action on farm Bill 2.0 this month.

Callie Eideberg: There’s a lot on the plate for all of Congress racing to get, through appropriations and keep this government funded, that it’s going to be a real big challenge for the chairman to find the time and the member capacity to focus on the farm bill in September. I think he and the ranking member really need to come together. Their teams need to come together and their members need to come together to have these conversations. And that is not quite happening yet. And then there’s a question as to if they are able to accomplish this and pass a bill out of committee. Where does it go from there? Because we do not see action from the Senate to take this up or produce their own bill at this time. There is a lot of concern and mistrust. I think, especially from the Democrats in the House after the cuts that were seen in the big beautiful bill, and that is preventing probably a number of members from coming to the table. And if we want to see a bill move forward this month or even by the end of the year, we really need to see an effort by all members to rebuild trust and, work together to get this bill done.

Lydia Johnson: Tom, I want to turn to you and train. A little bit of federal court says that the president didn’t have the legal authority to impose a lot of his tariffs. I’m curious, you know, for perspective, looking at this situation, what’s at stake for agriculture, with what’s with the federal courts right now?

Tom Sell: Yeah, that’ll go to the Supreme Court. And and we’ll see. Obviously there there are different authorities under which, you know, tariffs can be put on. I like the aggressive posture, but the uncertainty that’s created only kind of forces buyers and sellers to sit on their hands for a while. And that’s the real problem. To kind of see what may change next week or next month. And I think that’s a reality on the ground is there’s just not a lot of product moving. And that creates a real problem. You know, agricultural economics are different. You know, we have one big harvest and it’s about to come our way. And if we don’t have places to go with that product, man, we’re going to be in and, you know, in real trouble, particularly for road crop farmers, they’re already underwater. And that could only get the the back up of commodities could only exacerbate the problem.

Lydia Johnson: We’ll be back with more agri-pulse newsmakers. But first, Andrew Huneke looks at the challenging environment for American beekeepers in this week’s map it out.

Andrew Huneke: Honey, producers are dealing with more bee losses on a yearly basis. According to a recent survey by a Bee research group. Project Apis M this map shows the average loss rate for surveyed commercial beehive operations by state from June of 2024 to March of this year. Commercial beekeepers have more than 500 colonies in their operation. Those surveyed lost an average of 62% of their colonies during the survey period, with 12 states reporting losses of more than 70% of their colonies. Altogether, more than 840 beekeepers participated in the survey and reported losing an estimated 1.6 million colonies during the survey period. The survey also found that beekeepers stand to lose an estimated $600 million from lower honey production, less pollination income, and colony replacement. For Agri-Pulse I’m Andrew Huneke

Lydia Johnson: Thanks for joining us for another episode of Agri Pulse Newsmakers. Next week, both the House and Senate will be in session, and there’s still time to register for the Kansas City Ag Outlook Forum. You won’t want to miss conversations with top government and industry leaders on September 25th. Tune in next week and check our website any time for the latest developments on all things food, farm and fuel policy. For Agri-Pulse I’m Lydia Johnson. Thanks for watching.

Agri-Pulse is a trusted source in Washington, D.C., with the largest editorial team focused on food and farm policy coverage.