The One Big Beautiful Bill Act (OBBB), signed into law on July 4, 2025, introduces significant updates to Farm Service Agency (FSA) programs. These changes directly affect commodity support, payment limits, eligibility rules, and base acres. 

Expanded Commodity Support Programs 

The OBBB strengthens Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs, giving producers additional protection against market fluctuations: 

• Agriculture Risk Coverage (ARC): Revenue guarantee increased from 86% to 90%, with the maximum payment rising from 10% to 12% of benchmark revenue. 
• Price Loss Coverage (PLC): Reference prices for key crops such as corn, wheat, and soybeans increased by 10–21%. Beginning in 2031, reference prices will also adjust with inflation. 
• Automatic Selection (2025 only): Farmers will automatically receive the higher ARC or PLC payments for each covered commodity. 

Higher FSA Payment Limits 

Payment limits are also expanding, offering greater flexibility for producers and larger operations: 

• Individual Limit: Increased from $125,000 to $155,000 for Title I commodity programs. 
• Entity Limit: Pass-through entities, including LLCs, S corporations, and limited partnerships, now qualify for equal treatment under attribution rules. Each member who contributes active labor or management may qualify individually. 
• Inflation Indexing: Beginning in 2026, payment limits will be indexed annually to inflation

Updated Definition of Farming 

The Act also modernizes the definition of farming income for purposes of program eligibility. Producers who derive at least 75% of their average gross income from farming, ranching, or silviculture may be exempt from the $900,000 adjusted gross income (AGI) limit for certain conservation and disaster programs. 

Newly recognized farming activities include: 

• AgriTourism   
• Direct-to-consumer marketing of agricultural products 
• Sale of agricultural equipment 

Eligibility Requirements Remain Unchanged 

While payment limits and definitions are expanding, the requirement for producers to be “actively engaged in farming” remains unchanged. Producers must contribute personal labor, management, or both, and those contributions must be documented and distinct from others in the operation. 

New Base Acre Allocations 

For the first time in years, USDA will open the door to additional base acres. Up to 30 million new base acres will be allocated to farms that have grown program crops but currently lack base acreage. Eligibility is based on planting history from 2019–2023, with allocations beginning in 2026. 

As a producer, what changes should you remember? 

At Lutz, our agriculture experts combine deep industry knowledge with practical solutions to help agriculture businesses thrive in a changing marketplace. Our team is here to provide the expertise and support you need for long-term success. Contact us to learn more.