August 22, 2023
At first glance, the farm bill may seem like an esoteric piece of legislation that is renewed every 5 years with little relevance to most of corporate America. But this $600+ billion spending package up for reauthorization this year will have far-reaching impacts across the entire American economy.
At its core, the farm bill influences the agriculture industry through commodity supports, food assistance programs (SNAP), crop insurance, loan programs, and trade policies. But the ripple effect from the legislation is much broader.
For example:
- The food and beverage industry is shaped by farm bill commodity supports that lower input costs, nutrition incentives that spur demand shifts, and trade promotion programs that expand access to foreign markets.
- Rural broadband, utility, and infrastructure investments assist telecom, construction, engineering, and equipment providers in serving sparsely populated areas.
- The timber industry is affected by the farm bill’s forest management provisions around logging, wildfire prevention, and conservation programs.
- The energy sector is impacted by renewable fuels incentives that impact both corn growers with a focus on ethanol and producers of advanced biofuels, such as biodiesel and cellulosic fuels.
- Restaurants and retailers benefit from affordable, stable commodity and food costs enabled by the farm bill’s risk management safety nets for farmers—restaurants also have a stake in nutrition funding that impacts purchasing behavior.
- Banks and insurance companies have a vested interest in farm bill loan guarantees, subsidies, as well as crop and revenue insurance.
- The farm bill even impacts the tech sector through initiatives that advance data standards and innovation around agricultural data collection and analysis. Interestingly, FAA oversight related to using unmanned aircraft systems (i.e., drones) for agricultural purpose is also touched by the legislation.
- Finally, given the vast economic scale of the farm bill, manufacturers, transportation providers, and healthcare systems, can also be impacted due to the potential implications for supply chains, trade markets, and business taxation policies.
When you take a step back, the evidence is clear: The modern U.S. economy has become deeply interconnected thus increasing the importance of sweeping legislative packages like the farm bill.
With billions of dollars at stake, as well as policy changes that could help or hurt bottom lines, American corporations who choose to not engage to shape this year’s farm bill reauthorization do so at their, and their shareholders, own risk.
To learn more about the farm bill and how LSG can be your partner in engaging on the issues and policies critical to the success of your business, please contact Nick Schneeberger.