Who Gets Farm Program Payments?
Robert
A. Hoppe and David
E. Banker
There are two main types of farm
program payments—commodity-related and conservation.
Most commodity program payments (77 percent) go
to family farms with sales of $100,000 or more,
while most conservation payments (71 percent) go
to smaller family farms. Commodity-related payments
in total are much larger than conservation payments,
accounting for more than four-fifths of all payments.
Government payments fluctuate widely from year to
year (see “In
the Long Run”), due mostly to changes
in commodity-related payments.
Commodity programs target specific
field crops, largely feed and food grains, cotton,
and oilseeds. Payments are tied to the amount of
cropland enrolled in programs and yield histories.
Specialty crops and livestock are not supported
by traditional commodity programs, but may be covered
by disaster assistance and occasional ad hoc payments.
Farms producing nonprogram commodities may receive
substantial payments, however, if they also produce
program commodities or did in the past.
Commodity program payments to farms
are made roughly in proportion to their share of
harvested acreage of traditional program crops.
Medium-sales, large, and very large farms accounted
for 13 percent of all farms in 2003, but they together
received 77 percent of commodity-related payments,
reflecting a similar share of program crop acreage.
USDA’s Conservation Reserve
Program (CRP), which accounts for most conservation
payments, targets environmentally sensitive land,
not specific commodities. Retirement farms and residential/lifestyle
farms received 46 percent of conservation payments
in 2003. Low-sales farms received another 18 percent.
This distribution reflects the large numbers of
these three groups, their extensive landholdings,
and their tendency to enroll large shares of cropland
when they participate in CRP.
Residential/lifestyle farm operators
spend most of their work time off the farm. The
low labor requirements of the CRP also appeals to
many retired farmers (average age of 69 years) and
some low-sales farmers—56 percent are 55 or
older. A substantial share of all three farmer groups
find the CRP financially attractive and have cropland
available to enroll in conservation land retirement
programs.
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