Author: Matthew Farrell
The latest budget reconciliation package allocates more than $60 billion in funding for farm programs from 2025 to 2034. It's the largest increase in farm funding since 2002.
While making up small fraction of the One Big Beautiful Bill Act, farm funding encompasses a range of agricultural policies and provisions for farmers, leading some in the sector to call the new budget reconciliation package the "Mini Farm Bill" or "Farm Bill Lite."
Since House Resolution 1 was signed into law on July 4, 2025, farmers and ranchers are evaluating what it means for their risk management and insurance programs.
Here are three key implications farmers need to know.
1. Enhancements to crop insurance
The bill introduces expanded crop insurance coverage and access.
Supplemental Coverage Option
The Supplemental Coverage Option (SCO) is now available to Agriculture Risk Coverage (ARC) enrollees. Starting in 2027, coverage expands to 90% of expected revenue, up from 86%.
SCO, the Margin Coverage Option (MCO), the Enhanced Coverage Option (ECO), the Hurricane Insurance Protection — Wind Index (HIP-WI) and the Fire Insurance Protection — Smoke Index (FIP-SI) will receive subsidy support, increased from 65% to 80%. ECO will have 86% to 95% coverage available and 80% subsidy for the 2026 crop year, covering the gap year before SCO 90% is available.
Buy-up coverage subsidies
Subsidy rates for yield and revenue policies increase by 3% to 5%, depending on coverage levels.
| Premium Subsidy Rates by Coverage Level | ||||||||
| 50% | 55% | 60% | 65% | 70% | 75% | 80% | 85% | |
| Optional Unit | 67% | 69% | 69% | 64% | 64% | 60% | 51% | 41% |
| Basic Unit | 67% | 69% | 69% | 64% | 64% | 60% | 51% | 41% |
| Enterprise Unit | 80% | 80% | 80% | 80% | 64% | 80% | 71% | 56% |
Support for beginning farmers
The definition of a beginning farmer or rancher (BFR) expands from five to 10 years, with additional premium support provided during the early years of farming on top of current subsidy support.
Individuals have until November 30, 2025 to submit new BFR applications for 2026 policies that have sales closing dates on or before November 30, 2025, such as winter wheat and livestock endorsements.
Whole Farm Revenue Protection
Top coverage for Whole Farm Revenue Protection (WFRP) increased from 85% to 90% with no decrease in subsidy rate.
Expanded safety net protection through Agriculture Risk Coverage and Price Loss Coverage programs
The bill updates enrollment eligibility, crop reference prices and support levels ARC and Price Loss Coverage (PLC) programs.
- Adjusted gross income exemptions: Farmers deriving at least 75% of their adjusted gross income (AGI) from farming, ranching or related activities are exempt from the $900,000 AGI limitation for Farm Service Agency (FSA) program eligibility.
- Increased base acres: Up to 30 million new base acres can now be allocated based on covered and non-covered commodity planting history (2019-2023), allowing more farmers to enroll in these programs.
- Higher revenue guarantees: ARC guarantees now cover 90% of benchmark revenue (up from 86%) and the payment cap has increased to 12% (up from 10%).
- PLC reference price increase: PLC reference prices for commodity crops have increased by 10% to 20% and Effective Reference Price calculations have changed to 88% of the five-year Olympic marketing year average (from 85%).
- Automatic payments for 2025: For the 2025 crop year, farmers will automatically receive the greater of ARC or PLC payments, regardless of previous elections.
Adjusted payment limits and business structures
The bill includes changes to the payment limits for FSA safety net programs, ARC and PLC programs.
- Higher payment limits: The maximum amount of money a single person or entity can receive under certain commodity programs in a single year has been raised from $125,000 to $155,000.
- Expanded passthrough entity eligibility: S-Corps and LLCs are now treated as passthrough entities, with payment limits based on the number of first-level owners.
- Inflation adjustment: The new $155,000 limit will be adjusted annually for inflation using the Consumer Price Index for All Urban Consumers (CPI-U). The limit will automatically increase over time to keep pace with rising costs and maintain the real value of the assistance provided to farmers.
The provisions for farmers are numerous. Additional notable changes include:
The Livestock Indemnity Program (LIP) adds payouts for unborn livestock and introduces new payment categories for losses due to weather, disease, or predation.
The Livestock Forage Program (LFP) updates drought-related payment triggers, changes the severity of a D2 drought that triggers payments, and the amount of the payments received.
Dairy Margin Coverage (DMC) expands Tier 1 coverage limits from 5 million to 6 million pounds of milk production per farm, and updates enrollment criteria to reflect production years 2021 through 2023.
What farmers and ranchers should do to prepare
The United States Department of Agriculture (USDA) will begin rolling out many of these changes in the 2025 crop year, with program payments beginning in October 2026. To prepare for changes and maximize the benefits, we encourage all farmers to do the following:
- Review CCC-902 forms with FSA to ensure eligibility under new rules.
- Consult a tax professional to maximize deductions and exemptions — the Act includes several tax provisions that could impact farmers.
- Update conservation plans and practices as needed.
- Explore expanded crop insurance options for 2026.
By proactively reviewing eligibility requirements and exploring expanded insurance options, farmers can position themselves to fully leverage the benefits of this legislation. It's good practice to review your insurance coverages considering the new provisions or before making any investment changes.
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