How the OBBBA Supports Farmers in Indiana

In recent discussions with clients throughout Indiana and beyond, we have been exploring how the legislation emerging from Washington benefits our families. We hope to compile more of these posts to help everyone, and we plan to add more. Please like and subscribe to follow along.

There have been many questions from the farmers we help, so I decided to put the highlights here. We also included the potential impact in the next three to five years. We hope this helps and you find what you are looking for. As always, please do not hesitate to call or write with questions, and happy farming.

Here are some of the things we found:

1.Enhanced Farm Safety Net for Corn and Soybeans

The OBBBA strengthens commodity programs like Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC), which directly support your corn and soybean crops:

Increased Reference Prices:

The bill raises statutory reference prices for covered commodities, including corn (from $3.70 to $4.10 per bushel) and soybeans (from $8.40 to $10 per bushel). These higher reference prices apply retroactively to the 2025 crop year, meaning you could see increased payments if market prices fall below these thresholds. For example, if soybean prices remain low, as noted in 2024 with prices below production costs, the higher PLC reference price could provide a critical safety net.

Improved ARC Program: 

The ARC program’s revenue guarantee is increased from 85% to 90% of benchmark revenue, and the payment cap rises from 10% to 12.5% for crop years 2025–2031. This adjustment provides enhanced protection against revenue losses resulting from low yields or prices, which is particularly relevant given Indiana’s 2024 corn yield drop to 198 bushels per acre (down 5 bushels from 2023) and variable soybean yields.

Automatic Higher Payment for 2025: The Senate version, incorporated into the final bill, allows you to receive the higher of ARC or PLC payments for the 2025 crop year without needing to make an election. This flexibility could maximize your support, especially if market conditions are volatile.

Base Acre Adjustments: The bill provides a one-time opportunity to adjust base acres starting in 2026, based on a five-year average (2019–2023) of planted and prevented planted acres, plus up to 15% of non-covered commodity acres. This could benefit you if your farm’s historical base acres don’t reflect current corn and soybean planting, allowing access to higher PLC/ARC payments. However, a national cap of 30 million additional base acres may limit allocations if demand is high.

Impact (2025–2030): These changes provide a stronger safety net for your corn and soybean operations, particularly in years of low prices or yields. For instance, projected PLC payments for 2025 are estimated at $2.6 billion nationally, and the automatic higher payment option could increase your per-acre returns. However, the effectiveness depends on market prices (e.g., corn and soybean futures were volatile in 2025 due to short covering) and whether you can secure additional base acres.

2. Crop Insurance Enhancements

Crop insurance is a cornerstone of the OBBBA, with provisions that benefit all your crops, including specialty crops:

Increased Premium Subsidies for Beginning Farmers: If you qualify as a beginning farmer (now defined as having farmed for less than 10 years, up from 5 years), you’ll receive an additional 10% premium subsidy for crop insurance on corn, soybeans, and specialty crops. This reduces your out-of-pocket costs, making insurance more affordable, especially for high-value specialty crops.

Supplemental Coverage Option (SCO): The bill allows farmers enrolled in ARC to purchase SCO, enhancing coverage for shallow losses. This could provide extra protection for your corn and soybean crops against minor yield or revenue drops.

Specialty Crop Support: The bill increases funding for the Specialty Crop Block Grant Program starting in 2026, which supports state-level initiatives to boost competitiveness in fruit, vegetable, nut, and nursery crops. This could translate to grants or technical assistance for your specialty crop operations, though specific allocations for Indiana are unclear.

Barriers for Small Farms: While crop insurance is expanded, small and mid-sized farms (potentially including specialty crop operations) face administrative barriers, such as complex paperwork and agent disincentives to write policies for smaller operations. The bill’s focus on large-scale producers may limit its benefits for your specialty crops unless you’re a larger operation.

Impact (2025–2030): Enhanced crop insurance subsidies and SCO access could lower your risk exposure, particularly for corn and soybeans, where Indiana’s 2024 production was significant (1 billion bushels of corn, 341 million bushels of soybeans). Specialty crop support via block grants may offer indirect benefits, but you’ll need to monitor state-level programs for opportunities. If you’re a beginning farmer, the premium subsidy could save thousands annually, though smaller specialty crop operations may see limited direct insurance benefits.

3. Tax Relief Provisions

The OBBBA extends and expands tax provisions from the Tax Cuts and Jobs Act (TCJA), offering financial relief:

SALT Deduction Increase: The state and local tax (SALT) deduction cap rises from $10,000 to $40,000 in 2025, with a 1% annual increase through 2029, before reverting to $10,000 in 2030. This could reduce your tax burden, freeing up capital for farm investments, though the temporary nature limits long-term planning.

Permanent Section 199A Deduction: The 20% qualified business income deduction for pass-through entities (common among farmers) is made permanent, potentially increasing to 23%. This lowers your taxable income, providing savings to reinvest in your corn, soybean, or specialty crop operations.

100% Bonus Depreciation: Permanent full expensing for equipment purchases (e.g., tractors, irrigation systems) allows you to deduct the full cost upfront, reducing taxable income. For example, a $450,000 combine purchase could yield significant tax savings, as noted by an Iowa farmer.

Estate Tax Exemption: The estate tax exemption is permanently set at $15 million per person ($30 million per couple), indexed for inflation. This protects your farm from estate taxes upon transfer to the next generation, a major benefit for long-term family farm planning.

Farmland Sale Flexibility: The Protecting American Farmlands Act allows capital gains from farmland sales to be paid in four equal installments if sold to a farmer committing to farm the land for 10 years. This could ease tax burdens if you sell land, though it’s less relevant if you’re not planning to sell.

Impact (2025–2030): These tax provisions could save you thousands annually, particularly through bonus depreciation and Section 199A, enabling investments in equipment or infrastructure for all your crops. The estate tax exemption ensures long-term viability for passing your farm to heirs. However, the SALT deduction’s reversion in 2030 could create a tax cliff, requiring careful financial planning.

4. Biofuel and Trade Support

The OBBBA supports biofuels and trade, indirectly benefiting your corn and soybean crops:

45Z Clean Fuel Production Credit: Extended through 2029 (Senate) or 2031 (House), this credit incentivizes biofuels like corn ethanol and soybean biodiesel using North American feedstocks. While this could boost demand for your corn and soybeans, uncertainty around implementation rules (e.g., for sustainable aviation fuel) may delay benefits.

Trade Promotion: The bill restructures trade programs into a new Agricultural Trade Promotion and Facilitation Program, supporting market access for corn, soybeans, and specialty crops. This could open up export opportunities, although Indiana farmers have emphasized the need for infrastructure improvements (e.g., waterways, rail) to fully capitalize on trade.

Impact (2025–2030): Increased biofuel demand could raise corn and soybean prices, although the benefits depend on clear 45Z rules and market development. Specialty crop exports may grow through trade programs, but you’ll need to stay informed about Indiana-specific opportunities.

5. Conservation and Disaster Programs: The bill funds conservation and disaster programs, relevant to all your crops:

EQIP and CSP Funding: Increased funding for the Environmental Quality Incentives Program (EQIP) and Conservation Stewardship Program (CSP) through 2031 supports conservation practices like cover crops or soil health initiatives. These could benefit your corn, soybean, and specialty crop fields; however, the bill doesn’t prioritize climate-smart practices, which may limit resilience against Indiana’s variable weather.

Permanent Disaster Programs: Programs like WHIP+ and ELAP are made permanent, providing rapid-response relief for weather-related losses, which is critical given Indiana’s 2024 yield declines due to weather.

Feral Swine Eradication: Extended funding through 2031 addresses feral swine damage, which costs over $1.6 billion annually and could affect your specialty crops or fields.

Impact (2025–2030): Conservation funding could offset costs for sustainable practices, improving soil health and yields across your crops. Permanent disaster programs ensure quicker aid for weather or pest-related losses. However, the lack of climate-focused funding may limit long-term benefits for specialty crops vulnerable to extreme weather.

6. Specialty Crop-Specific Support While the bill emphasizes commodity crops, specialty crop farmers may benefit from:

Specialty Crop Block Grants: Increased funding starting in 2026 supports state-led initiatives, potentially providing grants, marketing support, or research for Indiana’s fruit, vegetable, or nut crops.

Research Funding: The Specialty Crops Research Initiative receives a funding boost (from $80 million in 2025 to $175 million in 2026), which could lead to innovations in pest management or crop varieties, though direct benefits depend on Indiana’s research institutions accessing these funds.

Impact (2025–2030): These provisions could enhance your specialty crop competitiveness, but the bill’s focus on large-scale commodity producers means smaller specialty crop operations may need to pursue state grants to maximize benefits actively. The lack of increased funding for sustainable agriculture programs, such as SARE or OREI, could limit support for innovative specialty crop practices.

Critical Considerations and Potential Challenges

Bias Toward Large Producers: The OBBBA’s crop insurance and subsidy enhancements favor larger operations, potentially marginalizing smaller or diversified farms, especially for specialty crops. Administrative barriers in crop insurance (e.g., paperwork) may persist, limiting your access unless you’re a larger operation.

SNAP Reductions: The bill cuts SNAP funding, reducing the federal share from 50% to 25% and tightening eligibility (e.g., work requirements extended to age 64, dependents redefined as under 7). This could reduce local demand for your specialty crops if low-income consumers face reduced food access, impacting Indiana’s rural economy.

Conservation Gaps: The absence of Conservation Reserve Program (CRP) extensions and limited climate-smart agriculture funding could hinder your ability to address Indiana’s increasing weather variability, particularly for specialty crops sensitive to drought or flooding.

Market and Infrastructure Dependence: Biofuel and trade benefits rely on external factors like 45Z rule clarity and Indiana’s transportation infrastructure (e.g., waterways, rail). Delays or inefficiencies could mute price boosts for corn and soybeans.

Practical Steps for Farmers

Assess Base Acres: Review your farm’s planting history (2019–2023) to determine eligibility for base acre adjustments in 2026. Contact your local USDA Farm Service Agency (FSA) office to prepare.

Explore Crop Insurance: If you’re a beginning farmer, apply for the enhanced premium subsidy. For specialty crops, check with Indiana’s crop insurance agents about new SCO options or specialty crop policies.

Monitor State Grants: Stay informed about Indiana’s Specialty Crop Block Grant allocations via the Indiana State Department of Agriculture, as these could fund marketing or infrastructure for your specialty crops.

Leverage Tax Benefits: Work with a tax professional to maximize Section 199A deductions and bonus depreciation, especially for equipment purchases. Plan for the SALT deduction’s 2030 reversion.

Engage with Conservation Programs: Apply for EQIP or CSP funding to implement conservation practices, which could benefit all your crops while reducing costs.

Track Biofuel Developments: Follow updates on the 45Z credit and biofuel demand, as these could influence corn and soybean prices. Indiana’s biofuel industry (e.g., ethanol plants) may offer local market opportunities.

Summary of 3–5 Year Impact.

Over 2025–2030, the OBBBA offers you significant benefits through enhanced PLC/ARC payments, crop insurance subsidies, and tax relief, particularly for your corn and soybean crops. Specialty crop support is less direct but available through block grants and research funding. Expect increased financial stability from higher commodity payments and tax savings, potentially saving thousands annually on equipment or insurance costs. However, smaller specialty crop operations may face challenges accessing insurance benefits, and SNAP cuts could reduce local demand. To maximize benefits, actively engage with USDA programs and Indiana’s agricultural agencies.