New Farm Bill, Tariffs and Possible End to Clean Energy Incentives May Impact Agriculture

Key Takeaways:
  • Changes in U.S. agricultural policies may impact farmers’ access to markets, labor and subsidies, emphasizing the need to stay informed.
  • Farmers should prepare for potential shifts in environmental regulations and trade policies as election results shape legislative priorities.
  • Proactive planning and engagement with industry experts can help farmers adapt to the evolving political and economic landscape.

 

The results of the 2024 presidential election may bring clarity and – hopefully – acceleration to legislative priorities that are important to the agriculture industry. Chief among agriculture’s priorities would be a new Farm Bill. But farmers also can anticipate significant changes in tariffs and in clean energy programs over the next four years.

A Renewed Focus on the Farm Bill

With a unified government under Republican control, the possibility that a new Farm Bill will emerge from Congress in 2025 is much stronger, though nothing is certain. In the meantime, there is hope that the 2018 Farm Bill – which has been extended once already – will be extended again to cover farmers’ needs in 2025. Wheat farmers already have their crops in and no federal program to register for support.

The nation is currently functioning under the $428 billion 2018 Farm Bill, which was written to fund a wide range of government programs over five years and was extended for one year in September 2023. It is now expired.

The problem is that a lot has changed since the last Farm Bill was crafted. Prices of everything, including equipment, fuel, seed, livestock feed and labor, have skyrocketed. This is evident in the fact that the current proposed 2024 Farm Bill – which is actually an aggregation of dozens of bills – totals nearly $1.5 trillion, three times the amount authorized by the 2018 Farm Bill.

With a Republican-controlled House and Senate, chances are much more likely that the partisan divisions that have prevented the Farm Bill from moving forward will now dissipate somewhat and compromise will be possible.

The biggest holdup on the Farm Bill has been funding for SNAP (Supplemental Nutrition Assistance Program), which represents more than 80% of the funding in the bill.

Trade Policies: Challenges & Opportunities

President-elect Trump’s proposed tariffs on Chinese goods, including agriculture products, aim to address trade imbalances and encourage China to increase purchases of U.S. goods. While there are challenges, such as the potential for retaliatory actions from China, there are also opportunities to strengthen other export markets and reduce dependency on volatile trading partners.

The administration is exploring ways to diversify agricultural exports, fostering relationships with countries in South America, Africa and Asia to expand demand for U.S. crops and livestock. Additionally, discussions around tariffs include provisions to redirect tariff revenues back to the agricultural sector, offering farmers financial stability in the face of shifting trade policies.

A Boost for Rural Infrastructure

One of the bright spots in the new administration’s agenda is a focus on rural infrastructure. Investments in roads, broadband and transportation networks stand to benefit farmers directly by improving supply chain efficiency, reducing costs and connecting rural communities to broader markets. Access to modern infrastructure will empower farmers to scale their operations and compete globally.

Clean Energy: A Time for Strategic Decisions

While clean energy incentives may face reevaluation, the Trump administration has signaled support for alternative pathways to energy independence, including investments in biofuels and ethanol production, which benefit corn and soybean farmers. For those already participating in clean energy programs, advisors recommend accelerating projects to secure current incentives.

Programs like the Rural Energy for America Program (REAP), created under the Inflation Reduction Act of 2022, may evolve under the new administration, but existing grants and loans are still available. Farmers should act quickly to capitalize on these opportunities before changes occur.

Questions?

President-elect Trump’s administration is also expected to bring a pro-business lens to agriculture, reducing regulatory burdens and increasing access to capital for farmers and ranchers. These efforts aim to foster innovation, streamline operations and allow farmers to focus on what they do best—feeding America and the world.

If you have questions about how the change in presidential administration may impact you and your farm, contact an Adams Brown farm advisor.