DECATUR, Ill. — Pros and cons from the Big, Beautiful Bill were a prime topic for discussion at the Farm Progress Show (FPS) in Decatur this year. Enacted on July 4, the federal funding bill will provide certain farmers with greater tax relief, along with reward incentives to expand or improve their operations. On the other hand, the BBB takes a major bite out of food assistance funding — a major sticking point for food producers — and reduces overall funding for the farm bill’s Agricultural Title over the next decade.

Among the proponents of the BBB was FBi Buildings, a steel shed manufacturing company that offers pole barns and other structures. At FBi’s display booth, representatives spent the three-day FPS informing customers about how they can take advantage of the BBB to improve their farm operations. 

Among the changes brought through the BBB, IRS Section 179 now allows farmers and ranchers to deduct up to $2.5 million in qualified expenses for the construction of a pole barn. Additionally, the phaseout threshold for this deduction has been increased to $4 million, with annual adjustments for inflation, according to FBi’s marketing associate Nettie Grubb.

“This means if you have been putting off building a new agriculture shop or cold storage shed, 2025 is your year to build. You will be able to write off 100 percent of your pole barn this year, without it being deducted over several years,” noted Grubb, in a recent blog shared with FPS visitors and posted online.

In addition, there are estate tax benefits within the BBB that can benefit farmers, Grubb said. They are:

• LLCs and S corporations will be treated as general partnerships for farm payments;

• Gains from equipment sales, agri-tourism, and direct marketing count as farm income;

• State and local tax limits increase;

• Additional deduction for farmers 65 and over. 

“Additionally, Section 199A made the 20 percent small business deduction permanent, allowing farmers to deduct a portion of their business income,” she added. 

In general, the BBB enacts many provisions typically authorized and funded through the farm bill, which expired in 2023 and is now considered unlikely to pass in 2025.  For instance, the Act served to sustain crucial commodities programs and increased spending for programs by an estimated $66 billion over 10 years. 

However, the Congressional Budget Office estimates that the bill’s Agricultural Title as a whole will reduce spending by $120 billion, primarily through cuts to the Nutrition subtitle. This is according to the Center for Agricultural Law and Taxation at Iowa State University, which explained that cuts from the Nutrition subtitle would accrue as the onus of administering the federal Supplemental Nutrition Assistance Program (SNAP) is shifted to states.

“The Act reduces the federal share of the cost of administering SNAP from 50 percent to 25 percent, beginning in Fiscal Year 2027. The Act thus increases the state’s administrative costs to 75 percent,” according to the Center. 

The Act also extends the PLC, ARC, and Dairy Margin Coverage (DMC) safety net programs through 2031, while increasing the ARC coverage guarantee for a crop year to 90 percent of the benchmark revenue (up from 86 percent). It also increases the ARC-CO benchmark revenue cap to 12 percent from 10 percent.

The Agricultural Title of the Act includes other provisions, including:

• Funding a program to encourage the accessibility, development, maintenance, and expansion of commercial export markets for United States agricultural commodities;

• Funding agricultural research, including a specialty crop research initiative

• Increasing funding for programs supporting specialty crops and USDA-certified organic agriculture;

• Funding for animal disease prevention and management;

• Funding for the National Animal Health Laboratory Network, the National Animal Disease Preparedness and Response Program, and the National Animal Vaccine and Veterinary Countermeasure Bank. (Iowa State University)

The BBB has particular benefits for livestock producers, according to the National Cattlemen’s Beef Association. These benefits are:

• Permanent extension of itemized deductions for disaster-related personal losses;

• Livestock Forage Disaster Program now pays after four weeks of drought and provides two monthly payments;

• Livestock indemnity: 100 percent for predation losses, 75 percent for weather-related losses, including unborn livestock; 

Animal health funding raised to $233 million per year for disease prevention and cattle health.

Farmers are still eligible for tax credits related to the installation of solar on their barns, but must begin construction by 2026 before funding is rescinded. In addition, construction must be completed before the end of 2027, as designated within the BBB.

“We will watch to see if a pared-down farm bill is introduced in the weeks to come. Legislation will be required to extend the Conservation Reserve Program beyond 2025,” observed the Center for Ag Law and Taxation. “Many legislators have also discussed passing federal legislation to restrict states from controlling the production practices of producers from other states (in response to Proposition 12 and similar state legislation).”