What Happens to the U.S. Farm Bill Extension After September of 2024?

Even though the volume of U.S. farming land and operators has declined a bit since 1982, there are still around 1.89 million U.S. farms raising crops for food, fuel, and a wealth of other purposes. These are crucial to our local, state, national, and international food supplies. These hardworking individuals perform a key service and need assistance.

Of those farmers, we subsidize roughly a third through our taxes and disaster relief insurance. That can cost the government anywhere from $10 to $20 billion, depending on which agency report you tend to read.

With so much money in play for such a crucial part of our economy, many people are a little worried as September 30, 2024, approaches, and another revision of the U.S. Farm Bill must be addressed. Let’s get into the details of what is likely to happen so you can prepare your real estate investments appropriately.

What is the U.S. Farm Bill?

There is a lot of scientific and economic theory behind the U.S. Farm Bill, but let’s cut it down to the simplest form for right now. The basic idea of this bill is to set the rules for funding most of the agriculture and food programs within the USA. It is like a giant chessboard deciding where to invest money for different crops, territories, and assistance.

The U.S. Farm Bill is designed to be updated about every 4-5 years. The reason for this is to respond to any changes in supply or demand of food quantities. Other reasons include issues like:

• Changing technologies or farming practices that will impact how much of a current crop yield will change or a massive shift in climate, drought, or other natural events.
• Economic shifts like a new trade agreement or fluctuating global markets (i.e., the war in Ukraine affecting wheat yields).
• Environmental concerns around conservation. This bill is designed to focus on what is best for the land, water, and resource management of farm territories.
• Nutritional and food security/insecurity concerns designed to address fluctuations in public health and nutritional science.
• Public policy and budgetary changes as new administrations come into power or a shift in political leaning changes current operations.

As you can see, there are many reasons to revamp the U.S. Farm Bill to accommodate a wide range of influences, from geopolitical stress to a bad rainy season.

What Happens in September 2024?

In mid-November of 2023, President Biden signed into law the Further Continuing Appropriations and Other Extensions Act 2024. This is a fancy name for a bill that ensures optional programs continue their operations until a better budget deal can be reached between various political entities in Washington, D.C.

This bill affects the U.S. Farm Bill and investing in real estate property. It extended the current bill from September 20, 2023, to September 30, 2024, before needing revamping. This covered everything from how to get food to low-income families to the legalization and production of hemp (cannabis with under 0.3% THC by dry weight).

If, and that is a BIG “if,” a new farm bill cannot be passed on or before September 2024, all the permanent (non-operational or omnibus provisions) laws regarding farming are enforced. These are provisions passed in 1938 and 1949. As you can imagine, that would not help the millions of farmers out there trying to make a living – so this is not likely to happen.

Why is This Important to Know?

Anyone in the agriculture sector needs to keep a close eye on the U.S. Farm Bill. It affects such a wide range of industries and commodities that it will shift how your investment fairs in the short and long terms.

For example, if you are in the CBD or THC industries, you can expect your sector to be a hot topic of debate as Congress hammers out changes to the anticipated 2024 Farm Bill. Conservatives are more likely to vote against hemp provisions, and liberals are more in favor.

Regenerative agriculture is also expected to be debated as this has to do with holistic farming and ranching practices. Kind of the same way the term “organic” was so new to politics back in the day, but is now an accepted turn of phrase.

Another interesting point in the farm bill that could transform the country is the adoption of IoT (Internet of Things) devices. Many farmers and ranchers are investing in connected equipment and ag-tech features. This is to remotely monitor areas without having to expend the human power or other resources crucial to a positive bottom line during operations.

A positive vote could mean more rural access to the internet, which is a game changer as roughly 23% of rural Americans do not have reliable broadband access.

How Does this Affect Real Estate?

If you are interested in or already own farmland and ranch properties, the Farm Bill directly affects your acreage valuation. Put simply, the lower the availability of subsidies and government assistance, the less value for rural farmland.

When insurance and brokerage firms look at land, they consider the stability of subsidies. These factors make land more attractive to current and prospective owners because there is more predictability and lower operational risks.

The closer we draw to the September 30, 2024, deadline, the more investors will consider risk management, insurance, conservation, incentives, land values, and the overarching regulatory environment of items like connectivity, crop allowance (hemp, corn, etc.), and other factors.

You can be sure everyone from Wall Street to Main Street, U.S.A., will watch attentively if the 2024 extension of the U.S. Farm Bill is addressed before the deadline. This will impact the pocketbooks of you, your neighbors, and international entities.