The Farm Bill is a comprehensive piece of legislation that governs various agricultural and food programs, including SNAP, and has significant implications for the agricultural sector and the broader economy.
Agriculture and food manufacturing are vital pillars of the US economy, generating over 11 million jobs. These jobs are split between direct employment in the sectors (4.7 million), supply chain effects (3.0 million), and household expenditures (3.3 million). Together, these industries contribute more than $1.25 trillion to the US GDP, which accounts for 4.8% of the total GDP.
The Supplemental Nutrition Assistance Program (SNAP) plays a crucial role in supporting low-income households, providing $120 billion annually to 22 million households for food expenditures. This program significantly influences the agricultural economy and job market.
The leading agricultural states, based on economic contribution, include:
For every 1% decline in the purchasing power of SNAP payments is projected to result in a loss of approximately 27,000 jobs. Due to the high efficiency of agricultural production and manufacturing, the direct job losses in these sectors are relatively low, totaling just over 3,000 jobs. However, other sectors would experience significant job losses:
Fluctuations in soybean prices are expected to have spillover effects on several downstream industries:
Similarly, changes in wheat prices will impact downstream industries, including:
Decreases in the purchasing power of SNAP benefits will have wide-ranging effects on the entire agricultural products supply chain. This includes direct impacts on agricultural production and manufacturing and indirect impacts on related industries such as retail and food services. Furthermore, policy changes affecting commodity prices will have both upstream effects on producers and their suppliers and downstream effects on industries that use these commodities as inputs.
Addressing these potential changes through thoughtful policy and economic strategies will be crucial in maintaining the stability and growth of the agricultural sector and its associated industries.