Both the House and Senate versions of the One Big Beautiful Bill Act (OBBBA) contain several pro-growth tax measures and are worthy of support. However, both versions of the bill also include big increases in farm subsidies. Those subsidies should be redirected to deficit reduction. Figure 1 illustrates the magnitude of proposed spending increases based on the House bill. The Senate provisions are nearly identical.
The need for such savings is especially important now that the Senate parliamentarian has disallowed changes to federal nutrition programs for violating the Byrd rule. Specifically, the parliamentarian ruled against measures to prevent immigrants who are not lawful permanent residents from participating in the Supplemental Nutrition Assistance Program (SNAP) and requiring states to contribute more to SNAP. The state cost-sharing provision alone would have reduced deficits by $41 billion over 10 years based on the Senate version of OBBBA.
Background
Except for immigration-related measures, farm subsidies are the biggest spending increase contained in the reconciliation bill. The House version of the OBBBA proposed to increase farm subsidies by $56.6 billion above currently projected spending, and the Senate bill included most of those provisions. These increases were included despite the fact that the U.S. Department of Agriculture’s Economic Research Service projects U.S. farm equity will reach a record high in 2025, and that net farm income will be the second-highest in history.
The most costly of these farm subsidies include changes to reference prices—minimum price guarantees set by the legislature. Cotton, peanut, and rice producers would be big beneficiaries from these price guarantees.
Economists at Ohio State University and the University of Illinois calculate that combined federal spending on seed cotton, peanuts, and rice will increase by 140% under OBBBA. Based on their cost estimates, each of the country’s 5,563 rice growers would receive an average subsidy boost of $1.4 million each. The country’s 7,000 peanut growers each would receive an average $465,000 increase. Cotton farmers would get another $380,000 each.
Combined with current subsidies, the average cotton, peanut, and rice farm would get over $1 million each over the next 10 years under OBBBA.
Whether that is a wise use of taxpayer dollars is a question that should be transparently debated as part of farm bill legislation, along with taxpayer-friendly reforms. Regardless of the success of efforts to bring SNAP reforms into compliance with the Byrd rule, Congress should specify that money currently targeted to increased farm spending will instead be used to reduce federal budget deficits.