Public Policy & Regulation attorney Liz Craddock, Senior Public Affairs Advisor Isabel Lane and Senior Policy Advisor Peter Tabor break down the impacts of the new One Big Beautiful Bill Act on the food and agriculture industries in this episode of "The Eyes on Washington" podcast series. They highlight how the legislation affects renewable energy and biofuels, including a rollback of several clean energy tax credits established under the Inflation Reduction Act (IRA). The conversation also covers changes to the Supplemental Nutrition Assistance Program (SNAP), updates on the Make America Healthy Again movement (MAHA), immigration issues within the agriculture sector, the Farm Bill and the shifting trade and tariff landscape.
Podcast Transcript
Peter Tabor: Hello, and welcome to another session of "The Eyes on Washington" podcast from Holland & Knight. I'm Pete Tabor, a senior policy advisor with Holland & Knight and co-lead of our Agriculture & Food [Policy] Team here in the Public Policy & Regulation Group. And I'm joined by my colleagues, Liz Craddock and Isabel Lane. I'll let Liz and Isabel introduce themselves.
Liz Craddock: Hi everybody. Liz Craddock, partner at Holland & Knight and co-lead with Peter of our Agriculture & Food [Policy] practice in our Public Policy & Regulation Group.
Isabel Lane: Hi everyone. Isabel Lane, also with the Public Policy & Regulation Group, a senior public affairs advisor focusing on energy, climate, agriculture and the intersection of those things with tax and funding.
Peter Tabor: Great. So I'm really thrilled to be working with Liz and Isabel, but also to be giving you this really quick update on a couple of things. There's been a lot going on, we're going to cover in the next few minutes. We're going to start with the One Big Beautiful Bill Act, which, as everyone knows, was signed into law by the president on July 4. There are a lot of implications outside of agriculture. We're going to focus on those that really do impact food and agriculture.
And so I think we'll start with Isabel on a couple of topics there. Just to familiarize everybody, this is a massive piece of legislation that folks weren't sure it would get across the finish line, but it's primarily focused on tax cuts and some spending on defense and immigration. But we'll kick it over to Isabel for an overview of the impact on ag with respect to biofuels and energy.
Isabel Lane: So with the One Big Beautiful Bill's passage, it includes a number of changes that are going to have significant impacts on the intersection between agriculture and energy, particularly on renewable energy and biofuels. One of the highest profile issues in the One Big Beautiful Bill was the rollback of a number of the IRA clean energy tax credits that were developed and created in the Inflation Reduction Act in order to advance the clean energy transition in the United States and to support biofuels producers as well. The bill does include rollbacks and significant changes to a number of those credits. In particular, wind, solar are hit hard. And both terminations to those credits and restrictions on foreign entities of concern or FEOCs and the incorporation of components and sub-components in renewable energy products from countries of concern will have significant impacts on the usability of a number of those credits. For the purposes of anyone that is doing solar on farmland or looking at renewable energy in conjunction with any of their agricultural products, there are a number of changes in this bill that are important to look at. And the Energy Tax Team here at Holland & Knight is doing a great job covering that. So I'll encourage you to go take a look at some of those.
I also do want to mention very quickly the changes to the 45Z Clean Fuel Production Tax Credit, which is the technology-neutral biofuels credit, originally established in the IRA. It was only a two-year credit in the IRA, so it went through 2027. This bill actually extends it through 2029, but does make some changes in its implementation that will have significant impacts for biofuel producers and the feedstock growers here in the United States. The proposal will ban foreign feedstocks under the tax credit grown outside of the U.S., Mexico and Canada. It also changes some of the emissions calculations and changes the value given to gallons of sustainable aviation fuel, or SAF, under the credit. So the impacts there will hit biofuel producers and American agricultural producers different. There was a lot of lobbying on this. Ultimately, I think between the House and the Senate, they ended up in a compromised position. But again, this is an area where H&K is going to be covering both implementation at Treasury and also the changes that are going to be happening in the biofuels market because of this credit and the One Big Beautiful Bill's extension and revision of it. So with that, I'll turn it to Liz to cover some of the other pieces impacting ag in the bill.
Liz Craddock: Thanks, Isabel. Yeah, there's a lot of changes, I think, on the tax side that will relate to energy and how that will impact farmers and the agriculture industry that has been partaking and utilizing some of those technologies to provide energy and create fuel, you know, produce fuel for the country. So a lot of exciting and potential changes there.
Another big change that occurred during this reconciliation package is on SNAP, or the Supplemental Nutrition Assistance Program. This is the program that provides what most people call "food stamps" to our economically distressed families and individuals across the country. There are several changes that are mainly on the administrative side, but there's one major one also on the participant side that I want to just quickly review. On the administrative side, while SNAP is a federal program, this bill is going to shift additional administrative costs to individual states in 2027. So the impacts here are delayed a few years, but it's going to increase the state's burden [by] 25 percent of the administrative costs. Currently, it's at 50 percent, so this will be an additional burden for states in implementing and doling out SNAP benefits to residents of those states. In addition, states with high error rates, and error rates can result from a whole host of reasons — the two main ones are either from overpayment or from an underpayment to the beneficiaries — but if states have a high error rate, then they will have to begin actually paying for their SNAP benefits to the beneficiaries on top of the extra administrative costs that I had mentioned earlier going to 75 percent. So this is going to be a big additional cost to states in the years to come. States mainly have balanced budgets. That's how a lot of states operate, unlike the federal government. And shifting these priorities, they'll have to shift a lot of their priorities around in the individual states to absorb these additional costs and administrating the SNAP program.
On the participant side, there are about 43 million people in the country, including 16 million children, who are on SNAP benefits. It's approximately 13 percent of the U.S. population. And just to give a little bit more of a fulsome picture, states with the highest participation include New Mexico, Louisiana, West Virginia, Oregon, Oklahoma. So we're talking about blue states, red states, from coast to coast. While the legislation doesn't touch the amount of a benefit a SNAP participant will receive, which is roughly around $200 a month in fiscal year (FY) 2024, it does change the work requirements for participants, raising the age of those required to work from 49 to 65 and having to work for at least 20 hours a week. So you heard a lot if you're paying attention to the passage of this bill in Congress about the decrease in SNAP benefits to participants. That's mainly twofold. One from the extra costs that states will have to endure in administrating the program, but also on the work requirement side. There's about 3 million Americans, they believe, who will lose their existing benefits under this new requirement. So, that's a significant change for that program.
Also on the SNAP front, while we didn't see any changes to items that are eligible for SNAP purchase under this legislation, that has been a hot topic here in D.C., especially under the new Make America Healthy Again mantra. And so while SNAP does a great benefit to economically distressed in the U.S., it's also a giant economic engine for grocery stores and American farm products, including food and beverage here in the U.S. So Pete, perhaps this is a great time to segue over to you on what you're hearing in regards to MAHA and developments there that will impact the U.S. food and agriculture sector.
Peter Tabor: Thanks, Liz. Yeah, while it's not involved directly in the One Big Beautiful Bill Act, you rightly pointed out that the changes to SNAP really do, they're perhaps an outgrowth of the MAHA movement under the Trump Administration. And one thing I'll note as well is that Secretary Rollins, when she came into office, made it a point that she was going to be very willing to approve SNAP waivers submitted by states. And I believe some states, several states have already made those requests and those SNAP wavers might involve, you know, the eligibility of certain products for SNAP programming in certain states.
With respect to MAHA overall, just to kind of give folks a quick overview, the MAHA Commission Report was issued in May, and it focuses on childhood chronic disease. And four specific factors it identifies include poor diet, environmental chemical exposure, lack of exercise or more screen time, that kind of thing, and chronic stress. Again, all related to childhood chronic disease. And then it comes up with some recommendations, I think, that have folks in the food and ag sector in certain sense, very interested.
Eating more whole foods. The specialty crop industry is perhaps encouraged by the MAHA Commission Report emphasis on eating whole foods and fruits and vegetables. Everybody is still trying to better understand in terms of the environmental stressors that there's two factors, I think, that really come up for food and ag stakeholders. That's the use of pesticides and herbicides. The MAHA Commission Report really stresses that there needs to be more scrutiny paid to the use of pesticides and herbicides. As folks know, RFK Jr. has spoken and even litigated issues related to the use of certain pesticides and herbicides.
The other area is ultra-processed foods, which is a term that doesn't quite have a definition. It's not an agreed definition. And so that's an area that has many food producers in the United States concerned in terms of the implications for SNAP and eligibility of certain products, including soft drinks, etc. We've already seen, I think, some voluntary moves by the food industry to remove certain additives and chemicals. And that kind of bleeds over into this other issue that's addressed a little bit in the MAHA Commission Report. But it's another issue that the Department of Health and Human Services has emphasized, and that is the generally recognized safe standard that is used by many in the food industry to essentially self-approve food additives without FDA formal review. And the MAHA Commission Report and RFK Jr. have indicated they want to revisit that, get independent studies to review the process and some of the additives. So I think those are things that we need to be watching out for and clients need to view and those in the food sector need to watching very closely.
In a very short segment, I want to also touch on an event that Secretary Rollins hosted on the steps of the Whitten Building. And this relates to, I'm switching gears a little bit here, the issues of immigrant labor and foreign ag land ownership in the United States. Secretary Rollins was joined by several administration officials, including Attorney General Pam Bondi, Defense Secretary Pete Hegseth and several governors. And they really focused on, I think, from an ag labor standpoint, the fact that we should not expect relief in the food and ag sector in terms of immigration enforcement. And so that is an issue that I think stakeholders will need to be paying very close attention to. And then on the issue of foreign ag land ownership, I think there's a lot of attention paid to this, but it looks like it's going to be an issue of putting in place measures that have already been discussed and agreed, adding the Secretary of Agriculture to CFIUS and updating the AFIDA provisions to ensure a closer oversight of acquisitions of U.S. agricultural land by foreign entities. I think, a lot of factors related to SNAP that Liz covered and related to this MAHA Commission Report, really looking at what we produce and how it goes into programs that many Americans rely on.
Now, I think we'll shift gears really quickly to the Farm Bill and the implications of all of this for the Farm Bill. And I'll start us off and then ask my colleagues to chime in. I think, as we know, the One Big Beautiful Bill Act essentially stripped away several key provisions or titles of the traditional Farm Bill and put them into the act itself. Those relate to reference prices for crops, crop insurance, as Liz mentioned, the SNAP provisions that were updated, and that leaves us with the big question mark as to whether we will see a "skinny" Farm Bill excluding those provisions that were addressed in the One Big Beautiful Bill Act — and if so, what the timing might be. And I think we're hearing that the House is eager to begin work on a "skinny" Farm Bill. Agriculture Committee Chair GT Thompson has indicated that he'd like to get the ball rolling on this. And he even threw out a number or something in the neighborhood of $8 billion for the Farm Bill in the late summer, early fall. And then I think we're hearing on the Senate side that there is an appetite to address this and move some of these other issues forward that weren't addressed in the recent legislation, but that their timeline is maybe more looking at early 2026. Liz, Isabel, I don't know what you've got to add to that. I'm sure you've been hearing and talking with other folks as well.
Liz Craddock: Yeah, thanks Pete. You know, as you mentioned, a ton of priorities were already carried in the One Big Beautiful Bill, whether it was, you know, disaster assistance or crop insurance or commodities, etc. So I think the state of play now is to see what wasn't taken care of. I think there are some priorities that still remain. I know that both chairmen of the Senate and the House committees are very eager to get a Farm Bill done. So their focus will still remain on trying to move forward on it. But I think the pressure is off a little bit on timing, given that some of the more critical needs in the agriculture sector were taken care of, but it's a great time to sort of dust off what wasn't taken care of, maybe some long-standing priorities for the ag sector that still remain that maybe haven't received a lot of attention in past Farm Bills because, you know, the commodity title sort of reigns or the nutrition title reigns. So it's a great, I think, time to sort of see how we can advance forward, maybe on ag tech and some other issues that are out there that people have as priorities that they'd like to move forward on. Isabel, you have any additional things to add?
Isabel Lane: Just from the energy perspective, echoing a lot of what you just covered, Liz. There are a lot of pain points after some of the changes in the One Big Beautiful Bill for some biofuels producers and for renewable energy interests in the United States. And looking for opportunities to use the Farm Bill to sort of tackle and address and create more opportunities where those changes were made could be something that the energy industry is trying to focus in on and carry into the next year and into the next Congress. So some appetite there from those interests for sure.
Peter Tabor: Well, thanks to you both. The Farm Bill discussion we'll be very closely monitoring and engaged on that. And so for clients or potential clients with interest, please contact us. We're very much involved in that process to see whether a Farm Bill moves forward.
Shifting gears to trade, I just wanted to spend a minute or two looking at the trade landscape because it does affect U.S. food and agriculture production, U.S. food and ag exports. There has been so much going on that we probably need to devote a separate podcast to that, but suffice to say that Holland & Knight has a Tariff Task Force comprised of many attorneys and professionals who are covering this topic, addressing these issues. And I'm going to cover them very briefly here. With respect to reciprocal tariffs, they were supposed to have taken effect [July 9]. President Trump issued letters. This week he's issued, I think, a total of 21 letters to countries — and they've been made public — advising them of the tariff they will pay effective August 1. I guess serving as an incentive to those countries to come to the negotiating table. Again, the Commerce Secretary, the Treasury Secretary and the USTR are heavily engaged and involved in their teams, the administration, heavily engaged involved in negotiations with multiple countries. And so we've got a handle on that. I think the implications for U.S. agriculture involve possible retaliation if we don't see resolution that results in some sort of agreement. I'll add too that we're probably looking at 10 percent baseline tariffs as the cost of entry into the U.S. market for many products from our trading partners. And so that's something to keep in mind. The negotiations to date have pretty much factored that in. And I think it's becoming more and more accepted in many of the discussions that are happening, including with the European Union, with Japan, Korea, etc. There are also 232 investigations going. These are handled by the Department of Commerce. You're well aware that we've got steel and aluminum tariffs at 50 percent right now. We've got auto tariffs and parts tariffs at 25 percent. There is a raft of investigations. This week, the president announced that there would be tariffs increased on imports of copper into the United States, and we're expecting tariff investigations to conclude on timber, lumber and derivatives, and pharmaceuticals. So there's a lot happening there and other investigations as well underway.
And finally, in the trade space, not specific to tariffs, is USMCA review. We've been following this very closely. We understand that USTR is poised to issue the notice requesting input from stakeholders that will allow it to complete its work and deliver a report to Congress by January 1 on recommendations for updates to USMCA. Canada and Mexico are currently operating in a slightly different tariff environment, but this USMCA review piece, looking at how the Trump Administration has worked on some of these issues, I think this is going to be an opportunity for many food and ag stakeholders to really weigh in with the administration, ensure that their voice is heard and that their concerns are addressed in the USMCA review process. So that's a very quick overview.
And now I think we're going to shift gears again to look at what's coming, especially with respect to the FY of 2026, which starts October 1. The process is already well underway in both the House and the Senate for appropriations. And Liz, what are you seeing, hearing? What should we be focusing on in the coming weeks and months?
Liz Craddock: Thanks, Pete. Yeah, as you said, we've already seen the House move forward with their Agriculture Appropriations Bill. They were able to vote it out of committee in late June. So that process has already occurred. One of the first ones out of the gate. It is a decrease. The House bill is a decrease over FY25 funding by about $1.1 billion dollars or 4.2 percent. So the overall bill [that] is going to be on the House side is $25 billion. So we are continuing to see other Republicans on the House side want to decrease discretionary spending out of the federal government. Some of the key things I just want to highlight. While the overall bill includes USDA, it also includes FDA. So there are a few other agencies included in it. For the Department of Agriculture or USDA, the bill would provide $21.9 billion, which is about $800 million below FY25-enacted level. So again, we're seeing a decrease in the amount of discretionary spending for the agency. Some of the key priorities I just wanted to highlight is there was an increase for the Agriculture Research Service of about $2.5 million above FY25-enacted levels. This includes high-priority initiatives for emerging pests and diseases. So we continue to see, I think, a big focus from USDA on pests and disease and focusing on those over at the agency. Unfortunately, for a lot of our research institutions, is a decrease. In the National Institute for Food and Agriculture, or NIFA, it's about $25 million below the enacted FY25 level. Again, this is competitive research and capacity programs that support our nation's land grant universities. So I know a lot of those universities will be disappointed to see that number coming out of the House. It does maintain the amount of funding for APHIS, or the Animal and Plant Health Inspection Service, at $1.1 billion dollars. So again, that sort of pairs with the money that was focused on emerging pests and diseases. So that kind of, at the moment, seems to be a big priority for the House Ag Appropriations Committee, I think in pairing and keeping close on USDA and what their priorities are. We're taping this literally the day before the Senate full committee will be marking up their Ag Appropriations Bill. So we don't have the Senate framework yet, but they will eventually work their bill through the process. And by the end of it, hopefully by the end of September, we'll have a final Ag Appropriation Bill for FY26 and funding all of the USDA programs. So that's what's next for funding for USDA. I don't know if Isabel or Peter, you all have any other additional what's next on the agenda?
Isabel Lane: Sure, I do want to jump in and just mention a few items on the regulatory front. Now that the One Big Beautiful Bill is law, Treasury is going to need to implement many of the changes to the tax credits that I had previously mentioned. So there's going to be a good amount of attention paid to the Treasury and IRS rulemakings and notices coming out on some of those new provisions. The Holland & Knight Energy Tax Team is doing a lot of coverage of that, so I encourage you to keep eyes on that insofar as energy impacts your agricultural footprint. Also on the biofuels front, the renewable fuel standard is, of course, the most important policy driver for the biofuel industry in the United States. The EPA has issued a proposed rule to set volumes under that program for 2026 and 2027 and is aiming to finalize that rule by October 31 this year. So there's going to be an open comment period and a flurry of activity to try and shape the rule of that. That also has a protectionist slant like we are seeing in some of the tax credits. There's a restriction on the participation of imported feedstocks under the program and imported fuels. So, you know, a lot of back and forth between American agricultural interests on that and fuel producers. So an area to keep eyes on as well, certainly going to be a contentious and hot button issue in the months to come as the agency tries to finalize that rulemaking.
Peter Tabor: Yeah, I think there's so much to review, to discuss, to analyze, for our own benefit, for our client's benefit. I think the best bet for many of you listening is to contact us if you've got questions. We serve as a resource for clients. We're always happy to share more information. We're constantly gathering intelligence on all these issues.
And I think we're kind of at time. So we thank you for joining us. Thanks to my colleagues, Liz and Isabel, for all the hard work putting this together, and thank you again. We'll be in touch with another "Eyes on Washington" later this summer.
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