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Changing Farm Structure and the Distribution of Farm Payments and Federal Crop Insurance

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  • White, T. Kirk
  • Hoppe, Robert A.

Abstract

The distribution of commodity-related payments and Federal crop insurance indemnities to U.S. farmers has shifted to larger farms as more and more U.S. agricultural production is done on those farms. Since the operators of larger farms tend to have higher household incomes than other farm operators, commodity-related program payments and Federal crop insurance indemnities also have shifted to higher income households. By 2009, half of commodity-related program payments went to farms operated by households earning over $89,540, a quarter went to farms operated by households with incomes greater than $209,000 and 10 percent went to farms operated by households with incomes of at least $425,000. Current income eligibility caps and payment limits affect few farm households because most of them have incomes below the income caps or receive payments less than the payment limits. Based on 2009 Agricultural Resource Management Survey (ARMS) data, recent proposals to lower those income caps and payment limits would still affect only a small percentage of U.S. farm households, because their incomes would still fall below the proposed income caps and payment limits. Total Government program payments to U.S. farms were $12.3 billion in 2009. Total Federal crop insurance indemnity payments were $5.2 billion in 2009.

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Bibliographic Info

Paper provided by United States Department of Agriculture, Economic Research Service in its series Economic Information Bulletin with number 120309.

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Date of creation: Feb 2012
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Handle: RePEc:ags:uersib:120309

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Related research

Keywords: farm program payments; Federal crop insurance; Agricultural Resource Management Survey; structural change; income caps; payment limits.; Agricultural and Food Policy; Agricultural Finance; Industrial Organization; Public Economics;

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  1. Young, C. Edwin & Skully, David W. & Westcott, Paul C. & Hoffman, Linwood A., 2005. "Economic Analysis of Base Acre and Payment Yield Designations Under the 2002 U.S. Farm Act," Economic Research Report 33594, United States Department of Agriculture, Economic Research Service.
  2. Allan W. GRAY & Michael D. BOEHLJE, 2007. "The Industrialization Of Agriculture: Implications For Future Policy," Working Papers 07-10, Purdue University, College of Agriculture, Department of Agricultural Economics.
  3. Barrett E. Kirwan, 2009. "The Incidence of U.S. Agricultural Subsidies on Farmland Rental Rates," Journal of Political Economy, University of Chicago Press, vol. 117(1), pages 138-164, 02.
  4. Bechdol, Elizabeth & Gray, Allan W. & Gloy, Brent A., 2010. "Forces Affecting Change In Crop Production Agriculture," Choices, Agricultural and Applied Economics Association, vol. 25(4).
  5. Barry K. Goodwin, 2009. "Payment Limitations and Acreage Decisions under Risk Aversion: A Simulation Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(1), pages 19-41.
  6. Barry K. Goodwin & Ashok K. Mishra & François Ortalo-Magné, 2011. "The Buck Stops Where? The Distribution of Agricultural Subsidies," NBER Working Papers 16693, National Bureau of Economic Research, Inc.
  7. Dimitri, Carolyn & Effland, Anne & Conklin, Neilson C., 2005. "The 20th Century Transformation of U.S. Agriculture and Farm Policy," Economic Information Bulletin 59390, United States Department of Agriculture, Economic Research Service.
  8. Michael J. Roberts & Barrett Kirwan & Jeffrey Hopkins, 2003. "The Incidence of Government Program Payments on Agricultural Land Rents: The Challenges of Identification," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(3), pages 762-769.
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Cited by:
  1. Jeremy G. Weber & Jason P. Brown & John Pender, 2013. "Rural wealth creation and emerging energy industries: lease and royalty payments to farm households and businesses," Research Working Paper RWP 13-07, Federal Reserve Bank of Kansas City.
  2. repec:fip:fedkrw:rwp2013-07 is not listed on IDEAS

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