OMAHA (DTN) -- The House Agriculture Committee on Wednesday night advanced its piece of the budget reconciliation package on a party-line vote. The House Ag provisions improve the farmer safety net from the 2018 farm bill but also cut a projected $290 billion out of food assistance over the next decade.

Under the plan, farmers would see better reference prices, a broader band of protection levels under commodity and insurance programs and see the payment limit for farm programs increased. The bill also seeks to shift food-assistance spending to the states to make up for cuts to those programs.

The Agriculture Committee is just one of the committees that held markups this week on different sections of the farm bill to add to a budget reconciliation package the House is putting together meant primarily to extend the 2017 tax cuts. The "One, Big Beautiful Bill," as it is being called, also would cut social spending in programs such as the Supplemental Nutrition Assistance Program (SNAP).

If the full reconciliation bill passes, the Senate is likely to change the agriculture provisions. The Senate budget plan, for instance, calls for cutting only $1 billion from the SNAP program.

Lawmakers began Tuesday night with a four-hour session made up primarily of Democrats speaking at length leveling their criticisms over the $290 billion in SNAP cuts. Republicans were brief in their remarks mainly declaring their support for the bill. That carried forward Wednesday as nearly every Democrat remained in the committee as they proposed amendments to overturn the SNAP cuts while most Republicans were absent. Wednesday evening a round of amendment votes fell along party lines with a series of 29-25 votes with the Republican majority prevailing.

SNAP CUTS

Under the bill, states would pay at least 5% of the SNAP benefit costs starting in 2028. States with higher error rates on payments could end up paying to 25%, which could top $1 billion for some states. The bill also increases state administrative costs. Another provision would tighten rules around SNAP eligibility, especially for people considered able-bodied and without dependents who are not meeting work requirements for the program.

The bill also would require parents with children age 7 or older to have at least one adult working or volunteering 20 hours a week or risk losing food benefits.

House Agriculture Committee Chairman Glenn "GT" Thompson, R-Pa., stressed that SNAP costs have risen by 80% since 2019 while the payment error rate nationally averages nearly 12%. "Clearly SNAP is not working as Congress intended," Thompson said.

Rep. Angie Craig, D-Minn., the committee's ranking member, criticized the partisan process, noting the committee wasn't meeting to do a traditional farm bill markup. She and other Democrats repeatedly pointed out the average SNAP benefit is about $6 a day. The SNAP cuts, she said, amount to the largest rollback of an anti-hunger program in the country's history.

"You don't build a life on SNAP. You build a bridge to the next paycheck, the next opportunity, that next moment of stability," Craig said.

FARM PROGRAM PROVISIONS

Republicans highlighted some of the challenges facing farmers right now and how the package will help the rural economy.

"Farmers are struggling with production costs up over 30% and commodity prices relatively low and they are in desperate need of some degree of relief," said Rep. Tracey Mann, R-Kansas.

Rep. Randy Feenstra, R-Iowa, said the bill would offer "much needed relief" to producers.

"You look at our farming community and they are struggling economically," Feenstra said. "You ask each and every one of them, they don't know how they are going to make their next operational loan payment."

For the farmer safety net, the bill increases reference prices for the Price Loss Coverage (PLC) program in line with the farm bill package that passed out of the committee last year. Those prices are:

-- Corn, $4.10 a bushel

-- Soybeans, $10 a bushel

-- Wheat, $6.35 a bushel

-- Cotton seed, $0.42 cents a pound

-- Rice, $16.90 per cwt

-- Grain sorghum, $4.40 a bushel

For Agricultural Risk Coverage (ARC-County) the ARC guarantee would increase from 86% to 90% of benchmark revenue. The maximum payment rate for ARC-County and ARC-Individual also would increase from 10% to 12.5% of benchmark revenue.

The bill also raises the loan rates for non-recourse marketing loans to producers. For corn, the new loan rate would be $2.42 a bushel; $6.82 a bushel for soybeans; $0.55 cents a pound for upland cotton; and $3.72 a bushel for wheat.

Farmers would also see payment limits increased under the bill from $125,000 per individual or entity to $155,000, starting with the current 2025 crop year.

The adjusted gross income limit for producers would remain at $900,000 -- except for individuals or legal entities that demonstrate at least 75% of their income is derived from farming, ranching or silviculture.

For base acres, the bill creates a mechanism to add 30 million base acres, reflecting that large tracts of farmland have gone into production, but those acres have been excluded from commodity programs. Eligibility to enroll those acres will be limited based on planted acres and an allocation formula that USDA will use to spread out enrollment.

In dairy, the bill would improve Dairy Margin Coverage (DMC) protection from 5 million pounds to 6 million pounds.

FARM GROUP REACTION

The National Corn Growers Association said the bill addressed several priorities such as improving ARC-PLC, increasing the affordability of crop insurance and doubling funding for trade-promotion programs.

Still, NCGA said corn growers remain concerned with the imbalance of investment across various commodities and potential impacts of the changes to the PLC program. NCGA is concerned with the adoption of a new floor price of $3.30 for corn, which would create a new gap in price coverage if the national marketing year average prices for corn were severely depressed. "The legislation unfairly expands the concept only to corn growers," NCGA stated.

NCGA also wants to see "more meaningful reforms" to adjusting base acres for ARC and PLC.

Rob Larew, president of the National Farmers Union, said NFU members appreciate the plans to improve the safety net and maintain conservation programs in the bill, but criticized the budget reconciliation process that led to cutting SNAP.

"Pitting farm and nutrition priorities against one another creates unnecessary division and weakens the broader effort," Larew said. "A strong farm bill -- however it comes together -- must reflect the full scope of challenges facing agriculture and rural communities, and it must work for everyone it touches: farmers, ranchers, and families across the country."

Chris Clayton can be reached at Chris.Clayton@dtn.com

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