BBB Title 1 Subtitle C - Farm Subsidies

Title I Subtitle C of the Big Beautiful Bill extends several farm subsidy programs into 2031 with cotton being extended into 2032. Large increases in sugar subsidies as well as dairy and expanding Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC).

From the Agricultural Act of 2014, there are set limits to certain commodities, such as wheat, oats, corn etc, at which point the Federal Government will set the minimum market value in order to stabilize a weak market (for example, if there is a market collapse in the value of wheat). These limits were increased, likely due to inflationary pressures.

The Department of Agriculture subsidizes farmland via a reference price for covered commodities. Basically, if a grain such as wheat or corn, falls below the reference price, then the Feds will payout the difference to farmers. Section 10302 of the Big Beautiful Bill will add 30 million acres of farmland that is eligible for this subsidy.

Agriculture Risk Coverage (ARC) & Price Loss Coverage (PLC) are systems in place to help subsidize farmers during periods of natural disaster or economic recession by paying farmers for crops if prices drop below a certain value or if the farm experienced a qualified natural disaster. Section 10303 of the Big Beautiful Bill expands the ARC and PLC coverage programs to open enrollment until 2031 and also allows farmers who accept ARC to now also be eligible for Crop Insurance.

Price Loss Coverage (PLC) is a farmer subsidy that protects farmers against low valued markets of commodities. If the average market price for a commodity, such as wheat or corn, drops below the set reference price, then the Federal Government will make up the difference through PLC and make a payout to the farmer. Section 10304 of the Big Beautiful bill extends the PLC program into 2031

The Agricultural Risk Coverage (ARC) program provides payments when the actual revenue for a farm is less than a guarantee set based on historical data and market conditions. Section 10305 of the Big Beautiful Bill extends the ARC subsidy program into 2031 for Farmers that experience a loss. It also increases the payout by 4% and one of the rate values by 2%.

Section 10306 of the Big Beautiful Bill is expanding the definition of "Farmer" in the Food Security Act of 1985 to include S-Corps & LLCs.

Section 10307 of the Big Beautiful Bill increases the maximum payout of Price Loss Coverage and Agriculture Risk Coverage for Farmers by $30k and then adjusting the value of $155k by the CPI inflation rate for each year thereafter.

Section 10308 of the Big Beautiful Bill creates new exceptions for the Adjusted Gross Income (AGI) limitations for farmers. Before, entities that earned more than $900k would not be eligible for government subsidies, however, now there are new exceptions in place, to be determined by the Secretary of Agriculture, that would allow the AGI to be waived if 75% of the AGI comes from farming or other farming related activities.

Section 10309 of the Big Beautiful Bill extends several different farmer preferred subsidy loan programs into 2031 while also adjusting one loan plan for inflation and bringing back a cotton storage payment system from 2006.