Other Ag News: Sifting Through the 2024 Spending Deal, and Looking Ahead to 2025

The 2024 calendar year ended with a flurry of Congressional activity. In the early morning of December 21, 2024, Congress passed, and the President signed the American Relief Act, averting a government shutdown. Beyond extending government funding, the American Relief Act also included – and excluded – numerous policy provisions that will bring lasting impacts to the U.S. food and farm system for decades to come. This post examines the American Relief Act and looks ahead to what a busy 2025 has in store for federal food and farm policy.

On Friday, December 20, the fifty-one-page American Relief Act (P.L. 118-158) was approved by the House of Representatives 366-34 and subsequently approved by the Senate 85-11 just after midnight on Saturday, December 21. In the days leading up to passage, the size and scope of the legislation shifted significantly amidst fluctuating negotiations. Throughout these negotiations, federal food and farm policy observers closely tracked several provisions. These included a second extension of the 2018 Farm Bill; agricultural disaster assistance funding; incorporation of the Inflation Reduction Act (IRA) conservation program funding; economic aid for farmers; and funding for programs without farm bill baseline (the so-called “orphan” or “stranded” programs). These stranded programs have been unable to issue new funding since the farm bill expired at the end of September 2024 without an extension.

During the initial stages of negotiations earlier that week, lawmakers had struck a bipartisan deal roughly 1,000 pages long. This bipartisan deal disappointingly omitted key conservation funding for farmers, but included agriculture disaster assistance funding and funding for the “stranded” farm bill programs, alongside economic aid for commodity farmers. However, at the 11th hour, negotiations were heavily influenced by President-elect Trump which, after a couple of false starts, ultimately led to the initial 1,000-page bipartisan deal being winnowed down to just 51 pages. This downsizing occurred in just a matter of hours and excluded many important policy provisions as a result. While Congress ultimately averted a government shutdown and extended the Agriculture Improvement Act of 2018 (2018 Farm Bill) until September 30, 2025, the final deal included several major disappointments, picking winners and losers in farm country.

The American Relief Act extends FY2024 government funding levels – first established by the Consolidated Appropriations Act of 2024 (CAA, P.L.118-42) – through March 14, 2025. Although agriculture programs – which fall under non-defense discretionary spending – would almost certainly benefit from the increase under the revised cap which would be triggered if a CR was in place on April 30, the revised caps were devised to incentivize Congress to enact full year appropriations legislation by April 30, 2025, under threat of steep cuts to defense spending. The American Relief Act runs through March 14, 2025, in large part to ensure lawmakers can avoid this cutoff.

Ultimately, however, the American Relief Act’s continuation of FY2024 funding levels only prolongs reduced funding for many critical sustainable agriculture programs. These programs include: Conservation Technical Assistance (CTA), the Grazing Lands Conservation Initiative (GLCI), the Sustainable Agriculture Research and Education (SARE) Program, the Office of Urban Agriculture and Innovative Production (OUAIP), Farmers Market Nutrition Program (FMNP), Rural Business Development Grants (RBDG), Rural Microentrepreneur Assistance Program (RMAP), and the National Sustainable Agriculture Information Service (ATTRA). The continuation of these cuts and others – even for a short time – will result in limited impacts and ultimately more farmers, ranchers, and rural businesses being turned away due to lack of funding.

For a brief moment during negotiations leading up to the final 51-page American Relief Act, it seemed possible, even likely, that Congress would rescind all unspent Inflation Reduction Act (IRA) conservation program funds and relocate them as part of the permanent, mandatory baseline budget for farm bill conservation programs. As a reminder, Congress provided generational one-time funding increases for specific conservation programs through budget reconciliation in 2022. In total, four key farm bill conservation programs received just over $18 billion, with $3.25 billion for the Conservation Stewardship Program (CSP), $8.45 billion for the Environmental Quality Incentive Program (EQIP), $4.95 billion for the Regional Conservation Partnership Program (RCPP), and $1.4 billion for the Agriculture Conservation Easement Program (ACEP). Each program received a lump sum of funds for fiscal years FY2023-FY2026, all of which were to remain available for use until FY31.

Using unspent FY2025 and FY2026 funds as well as projected cost savings from moving the funding into programs’ baseline, the American Relief Act could have added as much as $14 billion to these four popular conservation programs’ combined budgets. This funding would have then been reauthorized in future farm bills, providing tens of billions of additional dollars in coming decades to support the long line of producers choosing to add conservation practices to their operations. Such an investment would have been a generational win for farmers and natural resource conservation. This would also have been a long term strategic investment in USDA’s ability to help producers make their operations more resilient and productive in the face of extreme weather and volatile input prices.

However, in a disappointing and confounding twist, Congress abandoned this course, removed any such provisions from the American Relief Act, and left the unspent FY2025 and FY2026 conservation funds with USDA to be spent as originally intended. This means that for farmers today, for another year at least, there is still more money than ever before to enroll in CSP, EQIP, RCPP, and ACEP. In years to come, competition to enroll in these same programs will rise sharply for farmers as the funding cliff Congress failed to resolve hits beginning in FY2027 and as inflation continues to erode the static budgets of conservation programs. This failure to seize a cost-free opportunity to provide for the needs of farmers in both the short and long term will haunt lawmakers for years and unnecessarily limit farmers for decades.

Similar to IRA funding, during negotiations leading up to the final American Relief Act, it seemed likely that funding for farm bill “stranded programs” would be included in the final deal. These programs are generally newer, smaller farm bill programs that do not continue in the farm bill baseline because the authorizing and budget committees did not provide them a baseline to continue without funding from a new Farm Bill or a special provision in a CR. Currently, 21 farm bill programs do not have baseline funding. They received roughly $906 million in mandatory spending authority or less than 0.3% of the $428 billion total mandatory spending projected for all farm bill programs over FY19-FY23. 

The farm bill extension for FY24 provided one year of funding to 19 of the 21 stranded programs and for a brief moment, it seemed likely the extension for FY25 would provide another year of funding as well. However, at the last minute, Congress removed funding for these programs from the final package, leaving these programs, and the farmers and food system workers who utilize them, with an uncertain future. Without guaranteed funding, progress made in the areas supported by these programs is expected to stall, potentially setting back years of advancement in agricultural research, rural support, and conservation efforts. Programs of particular note that will go without additional funding are the National Organic Certification Cost Share Program (OCCSP), the 1890s Scholarship Program, and the Organic Production and Market Data Initiatives (ODI). These three programs serve a variety of purposes from supporting farmers transitioning to organic, to bolstering educational and career opportunities for students from rural or underserved communities around the country. 

These programs have small price tags but big impacts across all fifty states, from improving farm system efficiency, increasing farmers’ and ranchers’ resilience to extreme weather, supporting young farmers, and growing market access. For now, the future of these programs remains unclear. Most programs likely have some leftover funding from FY24 and agencies will continue to operate these programs until that leftover funding runs out. However, it is unlikely that we will see new requests for applications open up for any of these programs in the near future. NSAC will be looking further into the emerging consequences as these programs go unfunded, so stay tuned for a deeper dive.

While lawmakers lacked the gumption to reinvest available IRA funding into conservation programs or provide modest funding to support stranded farm bill programs, they appear to have had no trouble identifying $10 billion in economic assistance for certain commodity farmers. Eligible commodities include wheat, corn, soybeans, cotton, rice, and peanuts. The discrepancy revealed much about which farm businesses the new Congress will be inclined to prioritize (i.e. commodity producers), and which will continue to be left behind (i.e. specialty crop, small to -mid-scale, and diversified operations). 

The American Relief Act structured economic aid payments to be made to eligible producers whose expected gross return per acre is less than the expected cost of production. However, to determine the expected gross return, the formula does not incorporate indemnities already distributed or earmarked to these farms. This means that this new economic assistance will be distributed in addition to payments from the Federal Crop Insurance Program, the Noninsured Crop Disaster Assistance Program (NAP), the Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) commodity programs, and supplemental assistance for natural disasters authorized in this American Relief Act – even if those payments are sufficient to mitigate a farmer’s financial loss.  

Proponents of this economic assistance claimed that 2024 was a uniquely catastrophic year for commodity farmers. But an honest look at USDA data dispels that myth. In 2022, net farm income shattered previous records at $182 billion, driven by high commodity prices and direct government payments. By December 2024, that pinnacle was projected to level at $140.7 billion, placing net farm income – a measure of profit – markedly above its 20-year inflation-adjusted average, $121.4 billion. 

NSAC believes strongly that targeted assistance to farmers experiencing real need is an important and necessary function of the federal government. But bolstering profits for the country’s highest-earning farmers is a waste of limited government resources and is an insult to a majority of farmers, who tend to be at higher financial risk yet unable to access farm safety net programs altogether.

One positive aspect of the American Relief Act is the $20 billion that will be distributed to farmers impacted by natural disasters nationwide. NSAC successfully advocated to include eligibility for non-insured farmers as well as authorization for revenue-based assistance that has been demonstrated to streamline access for producers without prior enrollment in USDA programs. This is significant for accessibility, given that just 13 percent of farms were insured in 2022.

This is the largest agricultural disaster relief package authorized by Congress in recent years, surpassing the $10 billion distributed through the Emergency Relief Program (ERP) for 2020 and 2021 losses. ERP was the first disaster assistance program to offer a streamlined, revenue-based application for non-insured farmers; tax records were sufficient to compare loss due to a qualifying disaster to historical revenue and determine payment. Although non-insured farmers were technically eligible for assistance before ERP, the process required complicated paperwork, relied on USDA price sheets that did not reflect the loss of high-value crops, and generally replicated barriers that prevented small, diversified, and specialty crop farmers from accessing crop insurance.

The availability of assistance and the precise mechanism for distribution will be determined by the incoming Administration. With farmers still reeling from powerful hurricanes and storms nationwide, the most timely path would build upon the familiar and proven ERP model. USDA will also be tasked with distributing $220 million in block grants to eligible states, which can be tailored for a range of recovery needs. As always, NSAC stands ready to work with USDA to ensure that these funds are accessible to all farmers in need of assistance. 

With the American Relief Act close in the rearview mirror, we turn the page to 2025, the 119th Congress, and the incoming Trump Administration. As is always the case with a new Congress and new Administration, the agenda is long.

Early in 2025, Congress will focus its attention on approving the incoming Administration’s nominees to lead the federal agencies, approving FY2025 appropriations by March 14, and beginning a new budget reconciliation process that is expected to include a wide array of provisions ranging from tax to energy. For close observers of federal food and farm policy, it is as important to note what is being included in budget reconciliation as how it is being paid for. To fund what is likely to amount to billions or even trillions of dollars worth of tax cuts and other initiatives, lawmakers will seek to offset these costs through cuts or “reforms” elsewhere, including to the Supplemental Nutrition Assistance Program (SNAP) and potentially popular conservation funds from the IRA that have not yet been spent. 

Amidst this initial burst of activity, Congress will also begin plodding – yet again – toward a new farm bill authorization. After failing to pass a new farm bill in 2023 and 2024, lawmakers now face a narrower path to passing a farm bill in 2025 or 2026 given the slim margin of control Republicans maintain in each chamber of Congress. As in the 118th Congress, prioritizing bipartisanship seems the only plausible path to completing a farm bill before 2027. 

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