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Farm Income and Costs: Farms Receiving Government Payments

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According to the 2007 Agricultural Resource Management Survey (ARMS) (see box about the data source used in this analysis), 834,339 farms (about 40 percent of all U.S. farms) received government payments in 2007. The average payment per farm, $9,792, was down 24 percent from 2006—largely due to reductions in price-sensitive commodity program payments.

The amount of government payments and their importance to farm income varies by the sales classification of the farm operation. In 2007, 57 percent of all farms receiving government payments had less than $50,000 in sales. This group accounted for 19 percent of all program payments to farmers. Payment farms with less than $10,000 in sales received, on average, $2,040. Average payment per farm increased as farm sales increased, with payment farms generating over $1 million in sales receiving $75,601, on average. Million-dollar farms represented less than 3 percent of all farms receiving payments in 2007, but received over 22 percent of all government payments.

 

 

 

 

Distribution of farms, payments, and program crop production for farms receiving government payments by sales class, 2007 d

Farms in the two smallest sales categories received about 55 percent of the $3 billion in conservation program payments in 2007, but only 5 percent of the $7.2 billion in commodity program payments. Larger farms produce a disproportionate share of program commodities—farms with sales over $250,000 produced over three-fourths of all program crops (corn, wheat, soybeans, etc.) in 2007.

Government payments as a percent of gross cash income and average payment amount for farms receiving government payments by sales class, 2007

As farms increase by sales class, farm payments represent a smaller share of gross cash income. For payment farms with less than $50,000 in sales, government payments represented 15-20 percent of gross cash farm income in 2007. This share dropped to 3-5 percent for farms with sales of $500,000 or more.

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Further summaries of farms receiving government payments are available by:

 

Distribution of farms receiving government payments and average payment amount by farm typology, 2007

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Distribution of farms receiving government payments and average payment amount by collapsed farm typology, 2007

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Distribution of Farms Receiving Government Payments and Payments by farm specialization, 2007

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Distribution of farms receiving government payments and average payment amount by production region, 2007

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Distribution of farms receiving government payments and average payment amount by resource region, 2007

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Distribution of farms receiving government payments and average payment amount by number of operated acres, 2007

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Distribution of farms receiving government payments and average payment amount by value of sales, 2007

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Distribution of farms receiving government payments and average payment amount by net cash farm income, 2007

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Distribution of farms receiving government payments and average payment amount by operator household income, 2007

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Distribution of farms receiving government payments and average payment amount by size of payment, 2007

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Distribution of farms receiving government payments and average payment amount by operator age, 2007

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Distribution of farms receiving government payments and average payment amount by operator education, 2007

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Distribution of farms receiving government payments and average payment amount by operator occupation, 2007

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This analysis is based on ARMS 2007 Phase III, version 1 only. Version 1 provides the most complete specification of direct government payments to producers by program, and this analysis is about the effects of government payments by program. Marketing loan gains and net value of commodity certificates, which were collected as separate line items, were combined with all other Federal program payments. Conservation program payments include Wetlands Reserve Program, Farmable Wetlands Program, Environmental Quality Incentive Program, Conservation Security Program, Conservative Reserve Enhancement Program, and Conservation Reserve Program outlays. These estimates are not identical to other analyses of government program payments that are based on all versions of the ARMS 2007 Phase III.

 

 

 

 

 

For more information, contact: Steve Vogel

Web administration: webadmin@ers.usda.gov

Updated date: February 6, 2009