R Street Joins Coalition Urging Senate to Reject Costly Reference Price Hike in Budget Reconciliation

April 4, 2025

Dear Senator:

Our organizations strongly oppose efforts to increase reference prices in the budget reconciliation bill, for four reasons:

First, subsidies tied to reference prices will primarily benefit a few large farmers growing select crops.^[1]

Second, increasing reference prices will not serve most farmers and livestock producers.^[2]

Third, increasing reference prices will inflate the cost of farmland and basic farm inputs.^[3]

Fourth, Congress just provided the same farmers who would benefit from increased reference prices with $10 billion in assistance. Raising reference prices makes little sense during this time of large ongoing federal budget deficits.^[4]

We urge you to reject efforts to increase reference prices in the budget reconciliation process.

Sincerely,

See the original letter below:

^[1] Jared Hayes, “Benefit of Boost in Crop Reference Prices Would Mostly Only Aid Large Farmers in Just 100 Counties,” Environmental Working Group, May 17, 2024.; Schnitkey, G., N. Paulson, C. Zulauf, J. Coppess and B. Sherrick. “Statutory Reference Prices and the Next Farm Bill.” farmdoc daily (14):91, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, May 14, 2024.

^[2] Rebbeca Shewe, “The Farm Safety Net: A Closer Look at ARC and PLC,” National Sustainable Agriculture Coalition, February 7, 2025.

^[3] Jennifer Ifft and Todd Kuethe, “The Influence of Direct Payments on US Cropland Values,” farmdoc daily, May 22, 2015.; Jessica Cuswoth, et. al, “Family Farmers Need Support, Raising Reference Prices Isn’t the Answer,” Farm Action, November 3, 2023.

^[4] “USDA Unveils Plan for $10 Billion in Stop-Gap Farm Bill Subsidies,” Taxpayers for Common Sense, March 19, 2025.