The Congressional Budget Office (CBO) released its May 2023 baseline for the farm bill, which projects that total spending for the next decade will reach $1.51 trillion, the most expensive ever. This is an increase of +$31.5 billion from the February baseline and represents a nearly +74% increase from the original estimated cost of the 2018 farm bill of $867 billion. The full report is available HERE.
CBO releases these projections on expected spending for farm programs for the 10-year baseline – the current budget year plus 10 years – up to three times a year. The estimated outlays assume existing programs continue without changes. These numbers are particularly significant this year as they will be referenced by policymakers as they craft the new farm bill.
The bulk of the increase in the May baseline is due to higher spending on the Supplemental Nutrition Assistance Program (SNAP). In CBO’s latest 2023-2033 projections, SNAP is estimated to make up 81% of farm bill spending, followed by federal crop insurance at 7%. Below are more details about the CBO’s outlay estimates:
Increased demand for SNAP: The May 2023 baseline assumes that demand for SNAP will continue to grow due to factors such as rising food prices and the economic downturn caused by the COVID-19 pandemic. For 2023, CBO lifted its estimate from $127 billion to $145 billion, an +$18 billion increase. For the 10-year period of 2024-2033, the May baseline also forecasts an +$18 billion cumulative increase, from $1.205 trillion to $1.223 trillion.
Crop Insurance: Crop insurance outlays, which include delivery expenses, underwriting gains, and premium cost-sharing, are projected at $101. This is a +$4 billion increase from the February CBO baseline and is due primarily to higher commodity prices and increased demand for crop insurance.
Higher commodity support program costs: The May report expects programs such as Dairy Margin Coverage (DMC), Price Loss Coverage (PLC), Agriculture Risk Coverage (ARC), and authorized disaster support programs to cost $65.7 billion between 2024-2033, a nearly +$10 billion increase over the February baseline. Estimated outlays for livestock disaster assistance programs alone almost doubled from $5.7 billion to $10.9 billion.
Increased costs for conservation programs: The May 2023 baseline assumes that the cost of conservation programs will increase, due to factors such as the need to address climate change and the growing demand for land for development. Conservation programs such as the Environmental Quality Incentives Program (EQIP) and the Conservation Reserve Program (CRP) are estimated at $60 billion, an increase of +$2.5 billion over February’s projections that is primarily due to CRP outlays. (Sources: Farm Bureau, FarmdocDaily, CBO)
