119th Congress 2025-2026 Tax Reconciliation Act
Aug 01, 2025
The budget reconciliation bill known as the One Big Beautiful Bill Act was signed into law July 4, 2025. The Act will have a significant impact on American agriculture. Producer Ag will be actively working to define the Act and its implementation providing additional information and support to our producers and partners.
Let’s look at what this means for Crop Insurance:
Crop Insurance Provisions:
Beginning farmer and veteran provisions eligibility and premium subsidy changes.
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Change definition of beginning farmer from one who has been farming for less than 5 years to less than 10 years, which provides higher subsidies for crop insurance premiums.
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Similarly changes the definition of a beginning veteran farmer or rancher to one who has not farmed or ranched for more than 10 years. Remove provision which would have allowed a veteran beginning farmer or rancher to have been farming or ranching for up to 10 years to qualify for higher crop insurance premium subsidies. Prior law provided up to 5 years of experience for eligibility.
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15% higher premium subsidy for beginning farmers and ranchers and veteran farmers and ranchers in first two reinsurance years of enrollment in crop insurance. In the 3rd year, the percentage is 13%. The 4th year percentage is 11%. For the 5th to 10th years, the percentage is 10%. Prior law was 10%.
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Beginning Farmer and Rancher Benefit – includes first provision to change definition to individual who has been farming for less than 10 years in addition to updated levels for higher premium subsidies such as 5% for the first two reinsurance years, 3% for the 3rd reinsurance year, and 1% for the 4th reinsurance year.
Crop insurance coverage levels:
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Increases the coverage level for subsidized crop insurance, to 90% for individual coverage aggregated across multiple crop commodities and 95% for area-based policies.
Increase in crop insurance premium subsidies
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Increase premium support for individual-based coverage across nearly all levels — starting at 55% by an additional 3-5%.
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Enhances the Supplemental Coverage Option by raising the coverage level from 86% to 90% and boosts premium support from 65% to 80%.
Supplemental Coverage Option (SCO)
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Allow SCO with ARC-CO. (The language removes a provision previously disallowing SCO crop insurance coverage for crops enrolled in ARC.)
New Crop Insurance Policy Funding
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Beginning in Fiscal year 2026, funding for approval of new crop insurance policies to increase to $10 million per year, up from $7 million in prior years.
The tax reconciliation Act addresses several topics regarding agriculture. Producer Ag will continue to process the contents of the bill and provide further information on additional topics. For additional information and questions reach out to your Producer Ag Crop Insurance Specialist.
Article provided by Stephen Floyd, Crop Insurance Manager