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SATURDAY, AUGUST 1, 2026   |   SPECIAL REPORT & ANALYSIS

SPECIAL REPORT  |  SENATE FARM BILL 2.0

CLARIFYING: Farm Bill 2.0, Take Two: Boozman Buys a SNAP Truce and Bets on E15 to Carry the Coalition

The updated Senate text trades a one-year reprieve on SNAP state cost-sharing for a tougher 20% penalty tier in 2031 — and grafts year-round E15, with a refinery compromise the House never made, onto a farm bill still hunting for its offsets.
 

Analysis  ·  AUGUST 1, 2026

Clarifications: The offset section attributes the $6 billion / $12.5 billion delay estimates to Senate Agriculture Committee staff — CBO has not released a public score of the revised Senate bill. The EQIP analysis is clarified — funding is adjusted and re-timed, not cut, and no conservation money is used as an offset. (However, the posted Senate text puts EQIP funding for FY 2028 at $2.6 million and not $2.6 billion in what appears to be a drafting error.) The E15 analysis reflects per-facility refinery eligibility, the qualifying conditions for production-based reductions, the unresolved 2023-25 EPA petition backlog, the reallocation burden on non-exempt refiners, and Growth Energy’s initial reaction. The SNAP section reflects the rewritten delayed-implementation test (both FY 2025 and FY 2026) and participation data through April 2026.

Senate Ag Chairman John Boozman (R-Ark.) released revised text of Farm Bill 2.0 — the Agricultural Act of 2026 — late Friday and scheduled a committee markup for Thursday, Aug. 6, wagering that two late additions can do what six weeks of negotiation could not: new language permanently authorizing nationwide year-round sales of E15, and a one-year delay in the SNAP state cost-share regime that Democrats have made their price of admission. The E15 title splits the difference between the House-passed refinery bill and Midwest ethanol demands. The SNAP language gives states breathing room, then hits the worst performers harder. What the package still lacks is the thing that has stalked this farm bill from the start — an agreed-upon way to pay for it.

Click HERE for legislative text.
Click HERE for a title-by-title summary.
Click HERE for a section-by-section.
Click HERE for an overview.

The committee sits at 11-11 with Mitch McConnell absent. Boozman cannot report the bill without at least one Democratic vote — and cannot pass it on the floor without seven. Every provision in the updated text is best read as a bid for those votes.

The rollout and the stakes

The revised text lands five weeks after Boozman’s June 23 discussion draft, which drew respectful reviews for its more than 100 bipartisan measures but was conspicuously missing the two items that now headline the rewrite — E15 and any movement on SNAP. “Farm Bill 2.0 is built for the people who feed America,” Boozman said in releasing the updated text, adding that it “responds to concerns that states need additional time to strengthen administration of SNAP benefits and reduce payment error rates with a commonsense solution.”

The stakes are concrete. The current farm bill extension expires Sept. 30. The House passed its own farm bill April 30 on a near-party-line 224-200 vote, then passed year-round E15 separately on May 13. The Senate committee, by contrast, has genuine bipartisan ambitions but brutal arithmetic: with McConnell recovering from illness, the panel is deadlocked at 11 votes a side, and any bill that clears committee on partisan lines still faces a 60-vote floor test. We previously put the odds that a farm bill reaching the president’s desk before the Nov. 3 midterms at just 25%, with a one-year extension the default if talks stall past September.

Boozman is proceeding anyway. “We’ve got a good bill. I think lots of our members and both sides want to support it,” he said this week. Ranking Member Amy Klobuchar (D-Minn.), as of now, has not put out a formal press release on the updated text; the Senate Ag Democrats’ newsroom shows nothing. Her formal response will most likely come as an opening statement at Thursday’s markup, if not a written statement early this coming week.

SNAP: a one-year truce, a bigger hammer

The nutrition title is where the deal will be won or lost, and Section 4101 — innocuously captioned “State Cost Share Delay” — is the fulcrum. Under the reconciliation law enacted last year (the One Big Beautiful Bill Act), states must for the first time pay a share of SNAP benefit costs beginning in fiscal 2028 if their payment error rates run 6% or higher: 5% of benefits for error rates from 6% to 8%, 10% for rates from 8% to 10%, and 15% for rates of 10% or more. Current law also already permits certain high-error states to delay implementation until fiscal 2029 or fiscal 2030, depending on which year they meet the statutory test. The Senate text moves the general starting date back one year, to fiscal 2029 — and rewrites the transition rule rather than simply shifting it: under the bill, a state qualifies for the fiscal 2030 delayed start only if it meets the high-error test in both fiscal 2025 and fiscal 2026. It is a new qualifying test, not just a new calendar.

Then comes the hammer. New language provides that beginning in fiscal 2031, any state whose error rate is still at or above 10% pays 20% of benefit costs — federal share capped at 80% — a stiffer top tier than current law’s 15%. The structure is a straightforward political trade: Democrats get time, Republicans get a harder backstop, and Boozman gets to argue the bill strengthens, rather than waters down, the accountability regime his party wrote last year.

Figure 1. State share of SNAP benefit costs by payment error-rate tier under current law and the Senate Farm Bill 2.0 text. The Senate bill delays the start one year and raises the top tier to 20% beginning FY2031. The chart shows the ordinary cost-share tiers only; a separate transition rule governs when qualifying high-error states begin (see text). Source: One Big Beautiful Bill Act; Agricultural Act of 2026, Sec. 4101.

The stakes for states are enormous. USDA’s June 24 release put the national payment error rate at 10.62% for fiscal 2025 — roughly $10.1 billion in combined over- and underpayments — with Agriculture Secretary Brooke Rollins declaring that “state accountability is severely lacking in SNAP.” Nearly half the states face projected cost-share bills exceeding $100 million a year under the current-law schedule. Participation, meanwhile, has fallen by more than 4.5 million people — nearly 11% — through April 2026, the steepest drop in almost 30 years. Food-assistance analysts attribute much of the decline to last year’s eligibility and work-requirement changes, though enrollment shifts can also reflect administrative delays, economic conditions and ordinary caseload movements.

Figure 2. National SNAP payment error rate, selected fiscal years. Quality-control measurement was suspended in FY2020-21 during the pandemic. Source: USDA Food and Nutrition Service.

Whether one year is enough to bring a Democrat aboard is the open question. Democrats opened these talks demanding a two-year delay — estimates relayed by Senate Agriculture Committee staff put a one-year delay at roughly $6 billion and two years at approximately $12.5 billion — and Republicans balked at the longer window. “A two-year delay is a long delay,” Sen. Cindy Hyde-Smith (R-Miss.) said. Boozman’s answer, “we’re working on it,” suggests the number in the text may still move at markup.

The rest of the nutrition title is deliberately ecumenical. It makes SNAP online purchasing permanent, prohibits state EBT transaction fees, adds animal protein to eligible incentive foods, lets states hire contractors to ease certification backlogs, expands the dairy incentive program’s authorization from $20 million to $80 million, codifies a 95% domestic-content Buy American floor for school food purchases, and — in a nod to the error-rate fight — requires USDA to publish a supplemental report disclosing all payment errors regardless of dollar amount, without changing the tolerance threshold that excludes small errors from the official rate.

Table 1. SNAP state cost-share: current law vs. the updated Senate text. Source: Agricultural Act of 2026, Secs. 4101 and 4112; P.L. 119-21.

Inside the E15 title

The bigger surprise is Subtitle E of the miscellaneous title — Section 12501, “Year-Round E15 and RFS Reform” — because Boozman spent most of June insisting E15 probably would not ride on the farm bill at all, citing jurisdiction (the Clean Air Act belongs to the Environment and Public Works Committee) and the refinery-state politics that have killed the idea before. The reversal, brokered largely by Sens. Deb Fischer (R-Neb.) and Steve Daines (R-Mont.) with a push from the administration, converts the farm bill into the ethanol industry’s best vehicle of the year.

The section does four things. 

First, it fixes the Reid vapor pressure problem at the root: it amends Clean Air Act section 211 so the 1-psi volatility allowance that has always covered E10 applies to blends of 10% to 15% ethanol, making summer E15 sales legal nationwide, permanently, without the annual emergency-waiver theater. It also cleans up the Midwest governors’ opt-out mess, providing that states whose governors filed notices after Jan. 1, 2022, get the same 10-to-15%  treatment during high-ozone season.

Second, it winds down the small refinery exemption wars. Beginning in calendar 2028, EPA may no longer grant or enforce SRE hardship extensions; no refinery may petition for any year after 2027, no petition may be filed after July 1, 2028, and EPA must act on the backlog by Oct. 1, 2028. 

Third, in place of case-by-case hardship petitions, the text creates a “small refinery certainty” carve-out — production-based reductions, not unlimited exemptions. To qualify, a refinery must have received the original statutory small-refinery exemption under the Clean Air Act, satisfy the bill’s small-refinery requirements, and have qualifying petitions and production history during 2023-25, including a petition filed by June 1, 2026. The annual reduction equals the lesser of the refinery’s current production or its qualifying 2023-25 production, and volumes above that threshold remain fully obligated. A refinery qualifies as small if it processes no more than 75,000 barrels of crude a day — per facility, regardless of the parent company’s size — and where current rules force small refineries to reapply for hardship relief every year, the Senate’s automatic reduction is far more predictable. Crucially for the ethanol side, EPA must reallocate the exempted gallons to other obligated parties — less a cushion equal to 500 million gallons of conventional biofuel — so the renewable fuel mandate’s total demand pull largely survives.

Fourth, it restores RIN credits retired by small refineries for the 2016-18 compliance years and orders EPA to finalize, within 18 months, a rulemaking easing E15 dispenser-labeling and underground-storage-tank compatibility rules that keep many retailers on the sidelines.

Senate vs. House on refinery relief

Compare that with HR 1346, the Nationwide Consumer and Fuel Retailer Choice Act, which the House passed 218-203 on May 13 with Reps. Michelle Fischbach (R-Minn.), Brad Finstad (R-Minn.) and Angie Craig (D-Minn.) leading. The two bills share DNA — the same RVP fix, the same petition sunset dates, the same 2016-18 RIN restoration — but diverge sharply on what replaces the exemption program, and the divergence is where the money is.

The House gives small refining companies — those averaging no more than 75,000 barrels per day on a 2025 basis — an automatic 75% reduction in their renewable volume obligations starting in 2028, and then pointedly bars EPA from reallocating any of that exempted volume to other refiners. That no-reallocation clause is demand destruction in the ethanol industry’s eyes, and several biofuel groups swallowed it only grudgingly as the price of House passage. The House also adds a narrow “at-risk” petition process for refineries facing closure, capped at 150 million gallons.

The Senate text runs the trade in the opposite direction: deeper relief for a defined set of qualifying refineries — production-based reductions of up to 100% of qualifying 2023-25 volumes, capped at the lesser of current or historical production — paired with mandatory reallocation above the 500-million-gallon cushion, which preserves most of the mandate’s pull for corn and ethanol producers. It is, in effect, more generous to individual refiners and less costly to aggregate biofuel demand. That is the compromise shape Fischer and Daines have been shopping to get refinery-state Republicans to 60 votes, and it will have to be reconciled with the House product eventually — no easy task, since the value at stake shifts among refiners, ethanol plants and RIN holders with every parameter.

Two wrinkles in the Senate design deserve attention. First, reallocation is a zero-sum exercise: because non-exempt companies must absorb their competitors’ exemptions beyond the first 500 million gallons, large oil companies without small refining units could foot even more of the bill for bringing biofuels to market — a stark shift from the House approach those companies favored, and one that lands just as the administration’s record-high 2026 blending mandates have driven the value of an exemption sharply higher. Second, eligibility is keyed to whether a refinery qualified in 2023-25 — but EPA still has not decided some of those petitions, a backlog that has already drawn litigation, including an HF Sinclair suit over the agency’s delays. Refineries stuck in that limbo cannot yet know whether they are inside the club the Senate text grandfathers. Even the ethanol lobby is withholding judgment on the fine print: “Our priority is to get E15 to the president’s desk, and we’re continuing to review the details of the language in the farm bill proposal,” Growth Energy CEO Emily Skor said.

Table 2. Year-round E15 and RFS reform: the Senate farm bill text vs. the House-passed standalone bill. Source: Agricultural Act of 2026; HR 1346; Turner Mason & Co. analysis.

The offset question

Now the uncomfortable part. The SNAP delay is real money — according to estimates relayed by Senate Agriculture Committee staff, roughly $6 billion for a one-year delay — and as of the text’s release neither party has publicly identified where it comes from. The new 20% penalty tier in fiscal 2031 generates some offsetting savings on paper, and Republicans will argue that tougher error-rate discipline compounds over time. But CBO has not released a public score of the revised Senate bill. The agency’s one public E15 estimate — for the House-passed bill — carried substantial uncertainty, and analysts expect the Senate’s exemption-and-reallocation structure to be at least as difficult to model, since it shifts value among refiners, ethanol plants and RIN holders. House budget hawks have already signaled that a Senate compromise carrying unoffset SNAP spending will get a cold reception in conference.

One point of clarification on conservation: early readings, including a farmdoc daily analysis, flagged what appeared to be a nearly $2 billion reduction to EQIP over four years. On closer inspection of the updated text, EQIP funding is not cut over the life of the bill — it is adjusted, with amounts re-timed across fiscal years, and no conservation funding is being used as an offset for the SNAP delay or anything else in the package. That matters politically as well as fiscally: the working-lands program already turns away an average 41,600 applications and $1.54 billion in demand every year, and raiding it would have reopened the baseline commitment made in last year’s reconciliation bill. The visible pay-fors that do appear in the text are modest — an $18 million rescission of unobligated Biorefinery Assistance balances among them. Separately, the committee has settled on the House’s $12 billion figure for supplemental farm economic assistance rather than the larger number some senators wanted.

The deeper context makes the politics rawer. Last year’s reconciliation law cut SNAP by nearly $200 billion over ten years and used part of the savings to boost commodity supports — the first time Congress openly raided the nutrition side of the farm bill coalition to pay the farm side. Democrats regard the cost-share delay not as new spending but as partial restitution; many Republicans regard it as reopening a settled law. That framing gap, more than any line item, is what an offset deal has to bridge.

Table 3. The visible budget ledger around Farm Bill 2.0. EQIP funding is adjusted, not cut, and provides no offset. Cost figures are estimates relayed by Senate Agriculture Committee staff; CBO has not released a public score of the revised Senate bill. Sources: Senate Agriculture Committee; bill text.

Outlook: watch the vote count, not the clock

The Aug. 6 business meeting is the tell. If Klobuchar or another Democrat votes to report the bill, the one-year-plus-hammer SNAP construct will have proven sufficient, and the E15 title — which most farm-state Democrats support on the merits — becomes an asset rather than a complication on the floor. If the committee splits 11-11, the bill stalls in place, Sept. 30 arrives, and the well-worn machinery of another one-year extension takes over, with E15 forced back onto its harder standalone path through a 60-vote Senate. Either way, the refinery-relief gap between the chambers guarantees that even a successful Senate markup is the middle of this story, not the end. Farm groups desperate for the certainty Boozman promises should keep their eye on a single number next Thursday: one.

Bottom line

Boozman’s rewrite is a serious bid, not a messaging exercise: the SNAP one-year delay plus a 20% penalty tier is a genuine split-the-difference construct, and the E15 language — production-based RVO reductions for qualifying small refineries in place of the old hardship process, with reallocation preserving ethanol demand — is more favorable to agriculture than the House bill it will eventually have to be merged with. But the package still walks into markup without an agreed pay-for for its most important concession, on a committee where the chairman needs a Democrat he does not yet demonstrably have. Call it progress on substance, a coin flip on process — and keep the one-year extension paperwork handy.

AG POLICY & MARKETS DAILY   |   SPECIAL REPORT  |  SENATE FARM BILL 2.0 — SATURDAY, AUG. 1, 2026