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Updated October 20, 2023
Farm Bill Primer: Budget Dynamics
Congress may consider a new farm bill in 2023 because
2002 farm bill had a positive score and increased spending
provisions authorized in the 2018 farm bill (P.L. 115-334)
by $73 billion over 10 years under a budget resolution
begin expiring at the end of FY2023 (CRS Report R47659,
during a budget surplus. The 2008 farm bill was budget
Expiration of the Farm Bill ). From a budget perspective,
neutral, although it added $9 billion to outlays over 10
many farm bill programs are assumed to continue.
years by using offsets from a tax-related title. The 2014
farm bill had a negative score, reducing spending by $16
Farm Bills from a Budget Perspective
billion over 10 years. The 2018 farm bill was budget neutral
Federal spending for agriculture is divided into two main
and offset reductions in some titles with increases in others.
categories—mandatory and discretionary spending:
CBO’s May 2023 Baseline
•
In May 2023, CBO released the baseline that will be used to
Mandatory spending is authorized primarily for the
score bills during the 2023 legislative session.
farm commodity programs, conservation, crop
insurance, and the nutrition assistance programs. A farm
Farm bills have 5-year and 10-year budget projections
bill authorizes outlays for mandatory programs when the
according to federal budgeting practices. Converting the
law is enacted and follows budget enforcement rules.
May 2023 baseline into farm bill titles and adding funding
indicated in law for other farm bill programs, the baseline
• Discretionary appropriations are authorized, but not
for all farm bill titles is estimated at $725 billion over 5
provided, for most other programs, including rural
years (FY2024-FY2028) and $1,463 billion over 10 years
development, research, and credit programs. A farm bill
(FY2024-FY2033, Figure 1).
sets program parameters. Funding may be provided in
subsequent appropriations acts that follow separate
Figure 1. Farm Bill Titles with Mandatory Baseline
budget enforcement rules.
10-year projected outlays, FY2024-FY2033, bil ions of dol ars
Some farm bill programs have received both types of
funding. Discretionary appropriations are the primary
source for many programs, but mandatory spending usually
dominates the farm bill budget debate and is the focus here.
Importance of Baseline to the Farm Bill
The Congressional Budget Office (CBO) baseline is a
projection at a particular point in time of what future federal
mandatory spending would be under the assumption that
current law continues. The baseline is the benchmark
against which proposed changes in law are measured.
Supplemental funding in recent years is not part of the
baseline but may influence policy expectations.
When a bill is proposed that would affect mandatory
spending, the score (cost impact) is measured in relation to
the baseline. Changes that increase spending relative to the
Source: Created by CRS using Congressional Budget Office (CBO)
baseline have a positive score; those that decrease spending
May 2023 Baseline for the five largest titles and amounts indicated in
relative to the baseline have a negative score.
law for programs in other titles.
The relative proportions of farm bill spending have shifted
Increases in a bill’s total cost beyond the baseline may be
over time. In the 2023 projection, the Nutrition title is 84%
subject to budget constraints, such as pay-as-you-go
of the farm bill baseline, compared with about 76% when
(PayGo) rules. Reductions from the baseline may be used to
the 2018 farm bill was enacted. The increase in the 10-year
offset costs for other provisions that have a positive score or
baseline for the Nutrition title since 2018 is, coincidentally,
used to reduce the federal deficit. The annual budget
84%, reflecting consequences of the Coronavirus Disease
resolution determines whether a farm bill is held budget
2019 (COVID-19) pandemic, inflation, and administrative
neutral or can increase or must decrease spending.
adjustments in the Thrift Food Plan pursuant to the 2018
farm bill. For the non-nutrition agriculture programs in the
Recent Farm Bills’ Budget Positions
farm bill, current economic projections are that program
Over the past two decades, farm bills have had both
outlays would be $240 billion over the next 10 years
positive and negative scores relative to their baselines. The
(Figure 2), $30 billion or 14% greater than the 10-year
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Farm Bill Primer: Budget Dynamics
projection at enactment in 2018 (CRS In Focus IF12047,
Farm Bill Primer: What Is the Farm Bill?).
Figure 2. Agriculture Programs with Baseline in the Farm Bill
10-year projected outlays (excluding the Nutrition title), FY2024-FY2033, millions of dol ars
Source: Created by CRS using the CBO May 2023 baseline and amounts indicated in law for programs in other titles.
Effect of Supplemental Payments
In addition, P.L. 117-169 (often referred to as the
Inflation Reduction Act of 2022, or IRA) added over
Supplemental spending is not part of the baseline but may
$17 billion in outlays for four programs in the farm
be discussed because of its size in recent years. Unobligated
bill’s Conservation title and one program in the
balances may be cancelled or repurposed as a budgetary
Energy title. The IRA funding is not regular farm bill
offset for additional spending in new legislation. In FY2019
funding. It is not permanent; the new budget
and FY2020, the Trump Administration increased outlays
authority is provided until FY2026, and the law states
by over $25 billion to producers affected by retaliatory
that outlays may not occur after FY2031 (
tariffs. Since FY2020, Congress and the White House have
provided supplemental pandemic assistance of over $30
billion to farms and over $60 billion for nutrition assistance.
Figure 3).
Since 2018, Congress has authorized more than $15 billion
of ad hoc disaster assistance for agricultural losses (CRS In
Focus IF12101, Farm Bill Primer: Disaster Assistance).
Congress may address the effectiveness of farm bill
programs in light of this additional funding.
Programs Without Baseline
The 2018 farm bill added several new programs in Figure 2
that received a permanent budget baseline. However, 21
other programs received mandatory funding in the 2018
farm bill but do not have a baseline beyond their expiration
(CRS In Focus IF12115, Farm Bill Primer: Programs
Without Baseline Beyond FY2023). As Congress balances
budget considerations, providing mandatory funding for
programs without baseline would require budgetary offsets.
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Farm Bill Primer: Budget Dynamics
Figure 3. Conservation Title Baseline in the Farm Bill
and Conservation Funding in the Inflation Reduction
Jim Monke, Specialist in Agricultural Policy
Act of 2022
IF12233
Source: Created by CRS using the May 2023 CBO baseline.
Disclaimer
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https://crsreports.congress.gov | IF12233 · VERSION 4 · UPDATED