What Is the Farm Bill, and Why Does It Matter for the Federal Budget?

The Farm Bill is a multi-year piece of legislation that covers a variety of agricultural and nutrition programs. It provides an opportunity for policymakers to comprehensively address agricultural, food, conservation, and other issues. The Farm Bill is typically renewed every five years, and the most recent bill expired on September 30, 2023. A continuing resolution (CR) was enacted on November 16, 2023 to revive and extend programs in the 2018 Farm Bill through September 30, 2024. Without that extension, some programs would have reverted back to permanent law from the 1940s and others would have expired.

What Is Included in the Farm Bill?

President Franklin D. Roosevelt authorized the first Farm Bill as part of his New Deal agenda in 1933 with the goals of maintaining fair food prices for both farmers and consumers, ensuring sufficient food supply, and preserving U.S. natural resources. Since then, the Farm Bill has maintained the same goals and has been renewed 17 times. Starting in 1973, legislators added a nutrition section to the Farm Bill as a key way to broaden support for the bill among leaders representing rural and urban districts alike. More recently, lawmakers included horticulture, conservation, rural development, and research titles. The Agriculture Improvement Act of 2018, the latest reauthorization, included funding for 12 titles, but four of those areas typically make up the majority of spending in the bill:

• Nutrition includes the Supplemental Nutrition Assistance Program (SNAP), which provides funds for low-income Americans to purchase food in retail stores, in addition to smaller programs that provide other assistance.
• Crop Insurance covers subsidies for farmers’ insurance premiums and support for companies that insure agricultural commodities.
• Commodity Programs cover price and income support to growers of non-perishable crops as well as agricultural disaster assistance.
• Conservation includes funding for farmers to implement resource-saving practices on their private land.

How Much Will the Farm Bill Cost?

When the 2018 Farm Bill was enacted, the Congressional Research Service (CRS) estimated that it would cost $867 billion over the 10-year period covering fiscal years 2019 through 2028. Nutrition programs accounted for about three-quarters of that total. The 2018 legislation was similar to the Farm Bill enacted in 2014, with estimated spending around $2 billion (1 percent) higher than the total spending for the 2014 bill. Minor changes between the 2014 and 2018 bills included modifying commodity and conservation programs, expanding crop risk coverage, and revising nutrition assistance.

CRS released estimates of the cost of a new Farm Bill prior to the one-year extension. That estimate was based on the assumption that the new Farm Bill would retain most of the authorizations in the 2018 Farm Bill. CRS expected it to total $1.5 trillion (or 2 percent of federal spending) over fiscal years 2024 to 2033.

The increase in cost of $600 billion (or 69 percent) relative to the legislation from five years ago mostly stems from increased payments for SNAP. CRS expects SNAP spending to be 84 percent of the act’s outlays over the next decade. Part of the increase relates to the higher cost of food incorporated in October 2021 under the Department of Agriculture’s Thrifty Food Plan, which has resulted in higher SNAP benefits. In addition, the Congressional Budget Office projects that there will be 1 million new participants per year in the SNAP program over the next decade, pushing up the program’s costs. Another reason for the increased cost of the Farm Bill is that higher levels of inflation increase the cost of all programs under the bill, as there was a cumulative price increase of 24 percent between April 2018 and May 2023 (the months when baselines were established for the two Farm Bills).

Current Discussions Surrounding a Longer-Term Renewal of the Farm Bill

As policymakers are working to draft a new Farm Bill, discussions are concentrated on three areas of spending:

1. SNAP. Proposals from Republicans to make changes beyond the work requirement increases under the Fiscal Responsibility Act of 2023 are at odds with Democrats’ preferences for SNAP. Ellyn Ferguson, Congressional Quarterly’s Agriculture Policy reporter, foresees that as the main point of contention over the Farm Bill renewal.
2. Commodity Programs. Some policymakers who represent rural areas that are hospitable for crop growth want to expand commodity programs. Commodity benefits are regional – mostly benefitting the Southern states where a majority of the eligible commodities is grown.
3. Conservation. Because of significant climate-related funding already enacted as part of the IRA, there is discussion about whether to leave IRA climate funding separate from the Farm Bill’s conservation programs or to combine it with the Farm Bill.

Conclusion

The one-year extension of the 2018 Farm Bill allows programs to continue addressing vital agricultural, food, and conservation needs in America for another year. CRS anticipates the permanent fix — a new Farm Bill — to be the largest to date, though Farm Bill spending still does not represent one of the primary drivers of the country’s debt. As lawmakers develop this critical piece of legislation, they must determine how best to address the agricultural, food, and conservation needs of the United States against the backdrop of an overall fiscal outlook that is unsustainable.

Related: How do the House and Senate Appropriations Bills Differ?

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