H.R. 1 updates farm policy programs

STARKVILLE, Miss. -- Changes to farm policy programs through an omnibus bill passed by Congress and signed into law July 4 will improve growers’ safety nets and increase row crop reference prices.

The tax and spending cut legislation H.R. 1 includes updates to the Price Loss Coverage, or PLC, and Agricultural Risk Coverage, or ARC, programs and increased reference prices for row crops, including those grown most frequently in Mississippi.

The updates represent the most significant changes to federal agricultural legislation since the 2018 Farm Bill, which had twice been extended since it initially expired in 2023.

 “They basically put a Farm Bill update into this bill,” said Will Maples, an agricultural economist specializing in row crops with the Mississippi State University Extension Service. “Historically, farm bills have been standalone legislation passed every four to six years. Incorporating major farm policy changes into a larger bill is a departure from that practice.”

Payments to producers enrolled in the PLC program are activated when the national marketing year average prices fall below the reference prices. For the state’s largest row crop, soybeans, the reference price increased 19% from $8.40 to $10 per bushel.

Seed cotton increased from 36 cents per pound to 42 cents. Corn growers would be compensated $4.10 per bushel under the program compared to $3.70 in the previous farm bill. Both medium- and long-grain rice reference prices rose 21% from $14 to $16.90 per hundredweight.

The increases are retroactive, so they apply for the 2025 crop year. An escalator clause, which allows the effective reference price to increase, remains in effect with modification, and many commodities could see a higher reference price than the statutory, or minimum, price for 2025. The bill includes a 0.5% annual increase to statutory reference prices beginning in 2031.

“Farmers who previously enrolled in either ARC or PLC will receive the higher of the two payments this year, but that’s only for this year,” Will Maples said. “The need to update the reference prices came from them no longer being enough to cover input costs.”

Other row crop commodity statutory reference price increases include $6.35 per bushel for wheat, a 15% increase, and $630 per ton for peanuts, an 18% increase over the previous price.

Crop insurance subsidies also become more affordable under the bill’s provisions, rising by 3% to 5% depending on coverage levels. The Supplemental Coverage Option premium subsidy rate increased from 65% to 80%.

“These subsidies will be especially helpful to Mississippi growers because our premiums are significantly higher than other regions due to weather volatility,” Will Maples said.

Livestock, poultry and catfish producers will also have a larger safety net.

H.R.1 modified the Livestock Forage Disaster Program, or LFP, to allow more financial relief during droughts. Under the updated provisions, livestock producers are now eligible to receive two monthly LFP payments if their county experiences drought conditions for seven out of every eight consecutive weeks.

“Additionally, the program now triggers a single monthly payment after just four consecutive weeks of severe drought, offering faster support than before,” said Josh Maples, MSU Extension agricultural economist specializing in animal products. “These changes provide a more responsive safety net for ranchers who depend on grazing forage to sustain their herds.”

The bill directs the creation of a pilot insurance program for contract poultry growers, including broiler and laying-hen operations. This will allow producers to opt into index-based insurance covering extreme weather-related utility surcharges. Josh Maples said this would establish the first federal insurance framework of this kind.

“The program must be developed in consultation with poultry industry stakeholders and deployed across enough counties in top producing states to effectively test demand, feasibility and design,” he said. “A formal policy or insurance plan must be approved within two years.”

For producers of farm-raised fish, a new provision in the law authorizes compensation of at least $600 per acre for losses attributed to bird depredation.

“This may include not only the direct loss of fish due to predatory birds like cormorants but also associated revenue losses tied to reduced harvests and bird deterrence,” Josh Maples said.

The bill also makes permanent a federal estate tax exemption of $15 million per individual or $30 million per married couple, offering relief to Mississippi’s family-owned farms where land values often exceed cash in the bank. Without the protection, heirs of an estate were sometimes forced to sell off productive farmland to cover its taxes.

“This exemption per individual means most farm estates in Mississippi will be shielded from federal estate tax liability,” Maples said. “This removes a major barrier to families wanting to keep farms intact across generations.”