Ag Policy Blog

WASHINGTON (DTN) -- The chairman of the House Agriculture Committee is planning to update the farm safety net and crop insurance programs in the budget reconciliation bill being worked on by Republicans in Congress.

Rep. Glenn "GT" Thompson, R-Pa., told members of the North American Agricultural Journalists (NAAJ) on Tuesday that he plans to integrate updates to reference prices and other safety net programs as part of the upcoming reconciliation bill. Thompson told reporters the House Agriculture Committee is expected to hold its markup hearing for the reconciliation bill next week.

"We'll have our opportunity, our day in the sun, with budget reconciliation," Thompson said.

A budget reconciliation bill allows Congress to make cuts or increase spending for mandatory funding programs across the government. Republicans are crafting a bill with a focus on extending President Donald Trump's 2017 tax cuts and possibly passing other tax cuts as well. On the flip side, conservatives also want to make dramatic spending cuts in social programs to help offset the costs of those tax cuts. The process also allows the U.S. Senate to clear a reconciliation bill without needing 60 votes to pass it.

If the plan works, Thompson said Congress will deal with commodity programs and crop insurance for farmers and make changes to nutrition programs in the reconciliation bill. Thompson told reporters his plan would include provisions from the farm bill plan that was passed by the House Agriculture Committee last year but did not get a floor vote.

Thompson said the changes will update reference prices for the Price Loss Coverage and Agricultural Risk Coverage (PLC and ARC). The bill also would allow farmers to add base acres. Other changes will update the Dairy Margin Coverage (DMC) as well.

The House Agriculture Committee also is tasked with coming up with as much as $230 billion in cuts over 10 years under the House Republicans' reconciliation plan. It's expected those cuts would come through changes to the Supplemental Nutrition Assistance Program (SNAP). Thompson said the committee will be trying to trim SNAP cuts without affecting the individual payments to people in the program.

"There's no way that we're going to be cutting benefits," Thompson said. He added, "We're not going to be hurting people who are living in poverty."

Thompson suggested the House GOP plan for SNAP could end up requiring states to cover a portion of benefits to participants. Thompson noted states are seeking changes to SNAP while paying "zero in benefits" to people.

"If I had to pick between hurting people in poverty or upsetting state legislators, I know which direction I would go," Thompson said. "If my hand is forced to stay with the $230 billion, then I'm not cutting benefits."

FARM SAFETY NET DETAILS

If the bill language remains the same, farmers could see a 10% to 20% increase on statutory reference prices for ARC and PLC commodities. Increasing the statutory reference price also raises the "maximum effective reference price."

Also, the ARC guarantee would increase from 86% to 90% of benchmark revenue. The maximum payment rate for ARC-County and ARC-Individual also would increase from 10% to 12.5% of benchmark revenue.

At least some farmers also would get a one-time opportunity to establish base acres if they do not have base acres or their average planted and prevented planting acres do not exceed their base acres on the farm. Another provision would allow eligible acres to include a portion of acres planted to non-covered commodities.

For dairy, the bill would boost Dairy Margin Coverage (DMC) from 5 million to 6 million pounds. It also provides a 25% discount for farmers that enroll in DMC for the life of the farm bill.

USDA's disaster programs would also see various enhancements, including indemnities for the loss of unborn livestock.

In crop insurance, the bill could expand premium subsidy support for beginning farmers and ranchers. The House farm bill also increased premium support for the Supplemental Coverage Option (SCO) to 80%, providing access to all commodities to a policy similar to the Stacked Income Protection Plan (STAX) in cotton while also keeping SCO for Price Loss Coverage.

Maximum coverage levels would be increased to 90% for Whole Farm Revenue Protection and SCO.

The increase in farm programs was scored last year as costing between $50 billion and $53 billion over 10 years.

PUTTING TOGETHER A FARM BILL

Under Thompson's plan, the rest of the farm bill would come together after reconciliation is done. Thompson said he believes there would be bipartisan work to complete a farm bill, saying lawmakers from both parties have specific program changes they would like to see.

"If we are able to accomplish some things in budget reconciliation, and then we're able to do what's left over in the Farm, Food and National Security Act of 2025, all gets put back together as one -- one big, happy bill, one big, happy piece of legislation at the end of the day," Thompson said.

Rep. Chellie Pingree, D-Maine, told reporters the committee works well together and wants to get a farm bill passed. "GT has been a great chair to work with." Still, Pingree criticized the plans to cut as much as $230 billion from SNAP. She also noted any "state match" for SNAP would likely be a problem, including in Republican states. "That's a real problem for many of our states who don't have any money," she said.

Pingree also pointed out town halls with constituents have become more heated as people push back against some of the early decisions of the Trump administration. Pingree said there was recently a tractor rally in Maine led by farmers.

"My farmers might be a little bit different, but they are still farmers," she said

Sen. Amy Klobuchar, D-Minn., ranking member of the Senate Agriculture Committee, said that getting a farm bill done will require the backing of the Trump administration. Klobuchar said she's been very disturbed and concerned about moves by the administration and the impacts on the rural economy.

"There must be some support from the White House in terms of want to move on a big farm bill," she said.

Klobuchar also noted rural areas are dependent on SNAP, "particularly red states," and shifting costs of SNAP to states would likely lead to states being reluctant to fill the gap in benefits.

"This is just unbelievable if you look at these numbers," she said.

Sen. John Boozman, R-Ark., chairman of the Senate Agriculture Committee, said he supports updating ARC and PLC in the reconciliation package and then tweaking other programs later.

"We wouldn't do reconciliation in lieu of the farm bill. It would be in addition."

Asked about staff cuts and office closures at USDA, Boozman noted he's been part of discussions in the past in which senators ask USDA, "Do you really want to close that office?" But Boozman pointed to using technology to replace offices and noted farmers understand the national debt requires cuts in some areas.

"I think the farm community understands that. I think Congress understands that," Boozman said. He added, "I'm not sure we're running as lean and mean as we can."

Chris Clayton can be reached at Chris.Clayton@dtn.com

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