The "Big Beautiful Bill" and America's Real Welfare Queens

Stupid me, I started reading the bill recently passed by Congress

I just started reading the recently passed bill endorsed by Trump. At 829 pages, it promises a different government than we had with Biden - many of his pet policies are eliminated. But, the new government it promises is BIGGER, more wracked with debt, and more oriented to what you’d expect in a war economy.

But some context first.

The Big Beautiful Bill starts off promisingly enough. Early provisions cut $30 billion from the Supplemental Nutrition Assistance Program (SNAP) over ten years. It implements stricter work requirements for adults aged 50–54 without dependents. For instance, some adults who claim disability but aren't classified as totally and permanently disabled now have to return to work to continue to receive benefits.

So far, so good.

The bill also eliminates Medicaid eligibility for undocumented immigrants and tightens verification requirements, which the Congressional Budget Office (CBO) estimates will reduce Medicaid rolls by over 3 million people, mostly recent immigrants or non-citizens. In parallel, states are incentivized to more aggressively purge enrollment for technical non-compliance (like missed paperwork).

Additionally, the bill imposes limits on eligibility and funding for the Earned Income Tax Credit (EITC), removing or reducing benefits for many part-time workers, and reduced future funding for school meal expansions and low-income housing programs.

The justification? America is broke, we’re told. We can’t afford to fund able-bodied people “living on government handouts.”

Who can argue with that?

The Beautiful Contradiction

And then I got to page 28. Here the bill dramatically boosts farm subsidies, including many that are completely untethered from actual production. It's a contradiction so bold it almost escapes notice: the government cracked down on what conservatives once called "welfare queens," then handed billions to the real welfare aristocracy in America—politically protected farmers, especially huge agribusinesses.

For all the cultural emphasis on rugged independence in rural America, farming is, after all, one of the most heavily subsidized sectors in the U.S. economy. The vast majority of these subsidies go to producers of just a handful of crops: corn, soybeans, wheat, cotton, rice, peanuts, sorghum, and barley. These are the so-called "program crops" that are eligible for most Title I commodity subsidies, including Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC).

Notably excluded are most fruits, vegetables, and nuts—referred to as “specialty crops.” These crops receive minimal federal support and are often subject to planting restrictions if a farmer wishes to receive Title I subsidies on other base acres. No wonder America is the land of monocrops.

So, the policy choices made decades ago—and reinforced every farm bill cycle—continue to dictate what gets grown in America and what doesn't. The result is a federal food policy that supports calorie-dense, commodity-based agriculture over nutrient-rich, diversified farming.

As someone who grew up in farm country, government farm policies that amount to welfare have always bothered me. Farmers are, somehow, a group you cannot criticize. Meanwhile, our farm policies crush small farmers and deliver lavish welfare benefits to the big boys.

In Trump's new bill, American farmers—especially the wealthiest among them—saw their subsidies expanded, guaranteed, and protected. The Big Beautiful Bill's updates to the PLC program in particular illustrate just how far the federal government goes to protect farm incomes—not from crop failure, but from low prices.

Price Loss Coverage: Welfare by Another Name

The way these programs are calculated isn’t just complicated; it’s complicated on purpose. The more arcane the math, the easier it is for Congress to disguise who’s getting paid—and how much.

Price Loss Coverage (PLC) is a prime example. Under PLC, the government sets a “reference price” for each commodity. If the market price falls below that floor, Washington generously makes up the difference—with our tax dollars.

And the numbers get big fast. Take corn, for example.

The Big Beautiful Bill raises the statutory floor from $3.70 to $4.10 a bushel, then sweetens the math so payouts climb even higher.

Here’s how it works. The U.S. Department of Agriculture (USDA) takes the last five years of corn prices, drops the highest and lowest, and then sets the reference price at 88% of that average. That figure becomes the effective reference price—unless it exceeds 113% of the statutory floor, in which case it’s capped. For corn, this means the reference price can go as high as $4.63 (113% × $4.10).

Suppose the market price drops to $4.00. That’s a $0.63 difference. Multiply that by 150 bushels per acre (a typical “payment yield”) and 850 eligible acres (85% of 1,000 base acres), and the farmer gets a check for $80,325—even if they didn’t grow a single ear of corn that year.

Yes, you read that right. PLC payments are based on historical planting data, not current production. These “base acres” were originally calculated using planting history from 1991 to 1995, and in some cases were updated in later farm bills (like in 2002 or 2014) to reflect more recent trends—but they’re still mostly based on data that’s decades old. There’s no requirement that a farmer continue planting the same crop—or plant anything at all on those acres—to keep receiving payments. In fact, to maintain eligibility under the “agricultural use” requirement, the land simply has to be used for some form of agricultural activity.

Maintaining eligibility can be as minimal as grazing a few livestock, maintaining a cover crop, or even leaving land fallow under a conservation plan. In some states, simply mowing a field once a year to control weeds qualifies as agricultural use. These low-effort compliance strategies allow landowners to keep collecting payments on base acres with little—or even zero—actual production. It’s like paying a factory worker a bonus based on the widgets they made in 1999, even if they now run a food truck.

I discussed this on a recent podcast and one commentor said:

In FY 2023 alone PLC cost taxpayers $1.6 billion, and the richer formulas in the new bill will push that figure higher whenever prices soften.

The bill also quietly locked in advantages for those already benefiting from the program. It froze base acreage eligibility, meaning no new base acres can be created. So if you are a newish farmer and you decide to plant cover crops for a season, you’re locked out of the program. Only those with historical base acres—usually based on planting history from 1991 to 1995—remain eligible.

Beyond PLC: The Welfare Gravy Train

In addition to direct support tied to (real and hypothetical) production and price guarantees, some of the largest subsidy recipients—particularly in specialty crop regions like California—benefit from conservation and water infrastructure programs. These include funding for water storage, delivery systems, and drought resilience efforts that disproportionately aid large agricultural operations.

For example, the Resnicks—billionaire owners of The Wonderful Company—have long benefited from federally supported water projects in California’s Central Valley. Though not always listed under “farm subsidies,” these water programs enable otherwise unsustainable farming in arid regions by delivering subsidized access to water. In FY2023 alone, the USDA and Department of Interior directed over $3.2 billion to irrigation infrastructure, water conservation grants, and related support programs. Much of this spending indirectly subsidizes agriculture by lowering input costs and enabling expanded acreage in otherwise marginal regions.

Labeled as “water conservation” efforts, in practice the goal seems to be to allow large agribusinesses to expand water-intensive crops in arid regions. In effect, they conserve access to water for farming—not water itself. The result is that these programs sustain and even encourage high water usage in places that would otherwise be agriculturally nonviable.

The PLC and “water conservation” programs are only one part of the welfare state for farmers. Others include:

1. Crop Insurance Subsidies: The federal government pays around 60% of farmers' crop insurance premiums, and guarantees income if yields or revenues fall. Here's how it works: farmers choose a coverage level, often 70% to 85% of expected revenue, and the government picks up the majority of the premium cost. The higher the coverage level, the larger the subsidy.

A key feature is the use of “enterprise units”—a method of bundling multiple fields into a single insurance unit. This makes the insurance cheaper per acre, especially for large farms. It's a favorite tool of agribusiness because it reduces premium costs while still delivering big payouts when overall yields dip.

Example: A corn farmer expecting $800 per acre in revenue buys insurance for 85% coverage. If revenue drops to $500/acre, the insurer covers most of the $180 gap. If premiums are $40/acre, the farmer pays $16 and taxpayers pay $24.

In FY2023, federal crop insurance subsidies cost $12.5 billion.

2. ARC (Agricultural Risk Coverage): ARC pays when county-level revenues for a crop fall below 86% of a benchmark. It uses multi-year price and yield averages to set that benchmark.

Example: If the benchmark revenue is $750/acre and the actual county revenue is $600, a farmer might receive a payment of around $100/acre (subject to caps and payment acreage rules).

ARC payments totaled $1.7 billion in FY2023.

The bill gives producers the ability to switch between ARC and PLC each year, depending on which will pay out more. This is essentially a risk-free option embedded into law—a guaranteed annual bet with taxpayer backing. If ARC pays more, take ARC. If PLC looks better next year, switch.

3. Disaster Aid: Programs like WHIP+ and ad hoc Congressional bailouts cost billions more. During the 2018–2020 trade war, farmers received over $23 billion in Market Facilitation Program (MFP) payments. In 2020 alone, $35.7 billion in total farm aid was distributed—a record.

4. Conservation Programs: The Conservation Reserve Program (CRP) pays farmers to retire land.

In FY2023, CRP cost $1.9 billion. Over 22 million acres are enrolled - 22 million acres that can never again be farmed.

Increases in the New Law

I grew up hearing farmers complain about the weather. With subsidies like this who cares? With guaranteed income from the government, farmers have little to fear from bad weather and no market incentive to diversify or innovate.

Before diving in, it’s worth noting how these benchmarks and reference prices are set. They often sound technical—like Olympic averages or rolling market-year averages—but make no mistake: these are ultimately political constructs, not purely market-based indicators. Congress decides what years to include, what years to drop, what percent to multiply, and what caps to impose. The result is a benchmark price that often has more to do with lobbying than with economic reality.

The new bill significantly boosts support:

• Raises reference prices for key crops like corn and soybeans.

• Increases the effective reference price multiplier from 85% to 88%.

• Expands cost-sharing for crop insurance premiums, making higher coverage levels even more attractive and affordable to producers.

• Adds new payments for poultry insurance (pilot program), extending subsidized risk protection to an entirely new class of producers.

• Increases ARC and PLC caps slightly to reflect inflation, allowing higher total payouts per operation.

These changes mean billions more in expected payments in future years and lock in larger subsidies across a broader base.

Meanwhile, the rest of the subsidy complex remains unchanged, but still costs taxpayers dearly every year:

• Crop insurance: $12.5 billion/year.

• ARC: $1.7 billion/year.

• CRP (land retirement): $1.9 billion/year.

• Disaster aid (averaged): $5–$10 billion/year.

All of it continues on autopilot, quietly redistributing wealth to farmers, especially the top tier of American agriculture, reducing the amount of farm land available, and producing massive monocrops (that are not food) - all while the general public picks up the tab.

Subsidies Warp the Food System

As already mentioned, these subsidies primarily benefit producers of just a handful of crops: corn, soybeans, wheat, cotton, and rice. These commodities are storable, tradeable, and politically powerful. As a result, more than 90% of subsidies go to these few crops—many of which aren’t even made to be human food.

• Only about 10–15% of U.S. corn and soy production is used for food.

• Roughly 40% of corn goes to ethanol, low quality fuel and totally not needed for vehicles—not people.

• At least the last 40–45% of corn and about 75% of soybeans are used as livestock feed, ultimately producing meat, eggs, and dairy.

There is an alternative.

So while animal feed plays a legitimate role in the food supply chain—especially for poultry and pork, which require grain-based rations—it's worth noting that not all livestock need these subsidized inputs. For example, grass-fed cattle operations rely on pasture and hay, not soybean meal or corn.

I took this photo yesterday from my regenerative ranch

I happen to own a regenerative cattle operation in Uruguay. You can make a living raising grass fed cattle, but there's no on-ramp to the welfare gravy train. I and many others are trying to buck the trend, but the money on offer can distort behavior. If you choose to be a farmer in America today, it'll take everything you've got not to become a welfare queen yourself.

Regenerative cattle ranching is good, healthy, and actually enjoyable, but subsidies tilt the playing field toward feedlot operations and high-input agriculture. That’s why more people don’t do it.

And don't get me started on the idea that without the monocrop madness we wouldn't be able to feed the world. The American taxpayer is footing the bill for a food system that largely produces unneeded and low quality fuel, feed for animals, and processed calories—not fruits, vegetables, or high quality protein.

It's not all the farmer's fault. The USDA actively discourages farmers from planting fresh produce on subsidized land. This artificially narrows what America produces and ensures that the healthiest parts of our diet are often the most expensive.

Subsidies also encourage overproduction, which leads to depressed market prices—ironically triggering even more subsidy payments. It's a self-reinforcing loop.

The Political Optics

These programs are deeply entrenched. Americans like farmers. I do too. Pointing out this long standing grift is akin to criticizing firemen. But let’s face it, the system is broken and this bill makes it even worse.

And while the average farmer participates in the grift when he can, the big beneficiaries are large landowners and agribusinesses, not small family farms. According to USDA data, the top 10% of subsidy recipients collect more than 70% of the payments.

Farm subsidy records are public, and some of the top recipients are well-known corporate entities and wealthy individuals. For example, Gallo Vineyards, Inc., one of the largest wine producers in the U.S., received over $3 million in subsidies in a single year—even though wine grapes are not typically covered program crops. Riceland Foods Inc., a rice cooperative based in Arkansas, has received over $550 million in subsidies since 1995. And we already mentioned the billionaire agribusiness owners Stewart and Lynda Resnick—who own brands like Fiji Water and POM Wonderful. Many other top recipients appear as LLCs or family trusts, masking the identities of individual landowners but allowing for large-scale payouts across multiple entities.

What’s next in the BBB?

So now I'm on page 40 of this Big Beautiful Bill. Only 789 pages to go. Scanning ahead, it looks like it gets way worse from here - the policies most agree with are usually front loaded in the text of the bill.

Is it even worth continuing on? It’s a lot of brain damage to read through these bills. So, if you want me to continue to break down what I see, let me know.

Matt