Senate Farm Bill Leaves Taxpayers Holding the Feed Bag

The Senate version of the Farm Bill is here, and taxpayers (as usual) are being put out to pasture. With 10-year spending for farm and nutrition programs at $1.4 trillion and the national debt quickly approaching $40 trillion, one might assume that lawmakers would cow deficit spending into submission with long-overdue spending controls. Instead, they are delaying fiscal reforms contained in the One Big Beautiful Bill (OBBB) while exempting key programs from basic oversight. Moreover, lawmakers are tacking on costly “Buy American” provisions to school lunches and expanding crony carveouts. It’s time for Congress to stop chickening out and finally get spending under control. Below, the Taxpayers Protection Alliance (TPA) highlights five of the Senate Farm Bill’s most egregious provisions:

1. Delaying SNAP Cost Sharing Rewards High Payment Error Rates

The Supplemental Nutrition Assistance Program (SNAP) has long struggled with skyrocketing payment error rates. Under recent legislative efforts, cost-sharing requirements were established to shift a fraction of benefit costs onto states whose payment error rates exceed acceptable thresholds. The goal was simple and rooted in sound incentives: force state administrators to share in the financial risk when their programs suffer from administrative failure, thereby incentivizing better oversight, modernized systems, and reduced improper payments. As TPA policy analyst Vladlena Klymova noted in a recent op-ed, OBBB reforms ensure that “states that systematically fail to determine eligibility and benefits accurately will bear more of the consequences of their own loose administration. For example, Maryland, which has an astounding 13% payment-error rate, will be responsible for more than $240 million in annual benefits costs.”

The Senate Farm Bill proposal undermines this accountability framework by pushing back the implementation of state cost-sharing rules by one year. Delaying these requirements sends the wrong message to state agencies, effectively telling them that persistent waste and error need not be addressed immediately. There is one bright spot though: states with error rates at or above 10 percent will be required to cover 20 percent of SNAP benefit costs (starting in fiscal year 2031), up from the 15 percent cap previously set under OBBB. Lawmakers should embrace these steeper penalties while rejecting the one-year delay.

2. Rolling Back Notice and Comment Rulemaking Diminishes Accountability

For decades, the standard notice-and-comment process under the Administrative Procedure Act (APA) has served as an essential safeguard against executive overreach. By requiring federal agencies to publish proposed regulations, collect feedback from affected parties, and respond to public concerns, notice and comment ensures that regulatory actions remain transparent, evidence-based, and accountable to the public. Without it, unelected bureaucrats can and will impose costly mandates with little to no public scrutiny.

Unfortunately, Section 1401 of the Senate draft exempts Title I (Commodities) of the Farm Bill—which governs the primary agricultural safety net, revenue support, and commodity assistance programs—from standard notice-and-comment rulemaking under the APA. Bypassing public comment periods prevents farmers, small business owners, and taxpayers from analyzing the true economic and fiscal consequences of proposed rules impacting costly policies (e.g., Price Loss Coverage, Nonrecourse Marketing Assistance Loans) before they take effect. This shields agency decision-makers from public accountability and sets the stage for further increases in the size and cost of USDA programs.

3. Making SREs Permanent Picks Market Winners and Losers

The Renewable Fuel Standard (RFS)—which requires the blending of biofuel into America’s fuel supply—has increased energy costs for millions of families and businesses. As R Street Institute non-resident Senior Fellow Philip Rossetti noted last year, because of the RFS, “over a 10-year period (2014-2023), Americans spent $28 billion more on ethanol than the same amount of energy from gasoline would have cost.”

Small Refinery Exemptions (SREs) were originally created as a temporary hardship relief valve for smaller refiners struggling to comply with onerous federal mandates. However, replacing discretionary, case-by-case hardship petitions with a system of fixed statutory carve-outs—as the Senate Farm Bill would do—creates an uneven playing field.

Codifying permanent exemptions transforms temporary relief into a system where the government picks winners and losers. Rather than ending market distortions by (finally) repealing the RFS, making SREs permanent doubles down on costly policies and unwarranted government intervention in energy markets.

4. Expanding “Buy American” Mandates Drives Up School Lunch Costs

Under Section 4304, the Senate draft “require[s] that a school food authority must purchase at least 95 percent domestic products and commodities in each such category for each school year.” While framed as supporting domestic agriculture, rigid “Buy American” mandates distort supply chains and force local school districts to pay top dollar for food products (at taxpayers’ expense). School food authorities (SFAs) already must purchase American supplies to the “maximum extent practicable,” and as the Government Accountability Office notes, SFAs regularly find that domestic foods are simple too expensive compared to foreign alternatives. This appears to especially be the case with fruit. Tightening “Buy American” provisions will only exacerbate access issues to nutritious foods for schoolchildren.

Additionally, restricting international market competition in public food procurement artificially drives up program costs, forcing federal and local taxpayers to make up the difference. Instead of allowing school food administrators the flexibility to stretch taxpayer dollars and purchase high-quality and cost-effective meals for students, the Farm Bill prioritizes protectionist mandates that inflate government spending.

5. Lifting USDA Loan Caps Increases Risks to Taxpayers

The Senate proposal significantly increases statutory limits on USDA Farm Service Agency (FSA) direct and guaranteed farm ownership and operating loans. While proponents argue that higher borrowing caps are necessary to adjust for land values and input inflation, raising credit limits without an equivalent increase in credit risk safeguards shifts a massive financial burden onto federal taxpayers. Expanding government-backed lending programs puts public funds directly on the hook when debt service defaults occur.

Subsidized and government-guaranteed credit distorts commercial lending markets by incentivizing high-risk borrowing that private lenders would otherwise decline or price appropriately. Raising maximum loan ceilings allows larger consolidated operations to absorb a higher proportion of subsidized federal credit, concentrating taxpayer risk into fewer (and larger) portfolios. Rather than forcing the credit market to self-correct and evaluate risk transparently, expanding federal loan programs leaves taxpayers holding the feed bag.

Conclusion

Rather than let large agribusinesses reap a bumper crop of handouts, Congress needs to cultivate taxpayer-friendly reforms. Leaving taxpayers to plow through another cycle of carveouts and unchecked spending is a recipe for fiscal rot.