Farm Bill 2023: What Every Farmer Needs to Know

Oct 2, 2023

Last month, Congress went into recess for the summer with a number of key issues still on the table. One of the biggest: the 2023 Farm Bill. 

According to the most recent news, the 2023 Farm Bill will likely fail to be passed before the expiration deadline. While some programs will be unaffected by this delay, others, like Beginning Farmer and Rancher Development Grant program & the Organic Agriculture Research and Extension Initiative could lose funding immediately. 

Although many components of the Farm Bill remain the same from year to year, there are some changes that could impact your planting decisions next season. So here’s what every farmer needs to know about the 2023 Farm Bill, as it stands right now. 

What is the 2023 Farm Bill?

The Farm Bill is a piece of legislation that authorizes many of the appropriations and spending necessary to keep USDA programs running. First passed in the 1930s and renewed every five years, the Farm Bill originally had three primary goals.

  • Keep food prices fair for farmers and consumers

  • Ensure an adequate food supply

  • Protect and sustain the country’s vital natural resources

Although the Farm Bill has undergone many changes in the nine decades since its inception, these primary goals remain unchanged. 

Where does the 2023 Farm Bill stand right now?

As we mentioned earlier, the last Farm Bill was passed in 2018, titled the “Agricultural Improvement Act of 2018.” Since it expires every five years, Congress must renew or amend the Bill by September 30th. As we mentioned above, at this point it seems unlikely that Congress will meet that goal. 

According to the Congressional Budget Office (CBO), the 2023 Farm Bill, upon renewal, could potentially be the first trillion-dollar Farm Bill in U.S. history, with total spending projected at $1.51 trillion over ten years (approximately $150 billion annually). This number is $31.5 billion higher than CBO’s February baseline. 

The greatest expense is the Supplemental Nutrition Assistance Program (SNAP), which accounts for 85% of projected spending. The largest category directly impacting farmers is crop insurance, which accounts for 7% of the budget ($105.7 billion total, or $10.6 billion annually). 

What key areas does the Farm Bill cover?

While the Farm Bill significantly impacts U.S. Agriculture, more items are included than just farming (see our previous comment about SNAP above). The most relevant sections (called “Titles”) that impact farmers include: 

  • Prices and income support for farmers who raise widely-produced and traded non-perishable crops (e.g. corn, soybeans, wheat, rice), dairy, and sugar

  • Programs to help farmers implement conservation efforts, including pasture, cropland, and land retirement and easement programs

  • Export subsidies and international food aid programs

  • Federal loan programs to help farmers access financial credit needed to grow and sustain their operations

  • Programs to foster rural economic growth through business and community development—including farm businesses, rural housing, and infrastructure

  • Research grants to cover farm and food research, education, and extension programs that drive innovation and training

  • Crop insurance, both direct subsidies to farmers and subsidies to private crop insurance companies—the Farm Bill also authorizes the USDA’s Risk Management Agency (RMA) to research, develop, and modify crop insurance policies

What’s changing in the 2023 Farm Bill?

Although the objectives of the Farm Bill remain unchanged, the specifics vary from year to year. Here are some of the changes and challenges that the 2023 Farm Bill faces that every farmer should know.

Cost & funding

The 2023 Farm Bill will be the first trillion-dollar Farm Bill in U.S. history. Despite concerns over federal deficits, there are good reasons for the increased price tag. Not the least of which is the decline in farm income, requiring further subsidies to help farmers remain whole. 

Whether we’re talking about protecting crop insurance, increasing farm safety nets, bolstering support for specialty crops, or investing in more research, the demands of the U.S. Ag sector simply require new dollars. 

Farmer safety nets

One major concern is the rapidly increasing input costs, sped along by growing inflation. This increased precarity of farmers’s financial situations has increased the priority of farmer safety net programs. 

The 2014 Farm Bill established two safety nets for farmers:

  • Agricultural Risk Coverage (ARC) triggers payments on 85% of historical base acres if country revenue for a given crop year falls below 86% of the benchmark revenue for the county-based program

  • Price Loss Coverage (PLC) triggers payments on 85% of historical base acres if the marketing year average price falls below an established price floor (a reference price)

In 2023, the statutory reference price will remain the effective price floor for corn, soybeans, and wheat. Because we’ve seen relatively high commodity prices in recent years, no payments under these two programs have come into play.

As such, there are some advocates for stronger safety nets under these programs as part of the 2023 Farm Bill debate. The case for is that ag markets are more uncertain and volatile than in 2014, when they were last updated. On the other hand, the 2023 Farm Bill already has a trillion-dollar price tag, making it difficult to argue for additional appropriated funds. 

Sustainability and climate change

Perhaps the biggest Ag focus of the Biden Administration is the promotion of farming sustainability, climate protection, and non-traditional farm revenue sources (e.g. local foods, expanded meat processing, biobased economy products). 

Farmers should be aware of the dollars allocated to sustainable agriculture programs in the 2023 Farm Bill. These could provide opportunities to increase government payments, especially if traditional farmer safety nets underperform, as they have in the past few years.

READ MORE: How to incorporate sustainable farming into your lease agreement

Government payments

One of the hallmarks of the Trump Administration was the trade war with China, requiring a total of $23.1 billion in Market Facilitation Program (MFP) payments to help farmers stay afloat. Starting in 2023, the Coronavirus Food Assistance Program (CFAP) totaled over $31 billion, as well as $14 billion from the Paycheck Protection Program (PPP).

All told, non-Farm Bill programs accounted for over 70% of government support for agriculture from 2018-2022. Since the market shows no signs of decreasing volatility, many Ag advocates support incorporating more permanent disaster programs within the 2023 Farm Bill. 

Final thoughts on the 2023 Farm Bill

The 2023 Farm Bill is tasked with providing financial support not only to farmers, but to millions of Americans who rely on nutrition assistance through SNAP and other programs. Given current market volatility, these programs are in higher demand than before.

However, there’s no guarantee of passage. Debates are still raging, and there’s always the chance that the 2023 Farm Bill will receive cuts before passage. As such, farmers should hope for the best—but prepare for the worst. 

This means taking action to diversify your operation and mitigate against risk. Don’t rely on government payments to protect you from the market—do what you can and take action today. 

One way to mitigate against market risk is to pick up new ground and diversify your farming operation. Check local listings on the CommonGround marketplace to get started.