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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.

Suggested Citation

  • White, T. Kirk & Hoppe, Robert A., 2012. "Changing Farm Structure and the Distribution of Farm Payments and Federal Crop Insurance," Economic Information Bulletin 120309, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersib:120309
    DOI: 10.22004/ag.econ.120309
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    Cited by:

    1. Dutta, Ritwik & Saghaian, Syed, 2015. "A Chronological Study of Total Factor Productivity and Agricultural Growth in U.S. Agriculture," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196953, Southern Agricultural Economics Association.
    2. Robbins, Michael W. & White, T. Kirk, 2014. "Direct Payments, Cash Rents, Land Values, and the Effects of Imputation in U.S. Farm-level Data," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 43(3), pages 1-20, December.
    3. D'Antoni, Jeremy M. & Khanal, Aditya R. & Mishra, Ashok K., 2014. "Examining Labor Substitution: Does Family Matter for U.S. Cash Grain Farmers?," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 46(2), pages 1-12, May.
    4. Daniel A. Sumner, 2014. "American Farms Keep Growing: Size, Productivity, and Policy," Journal of Economic Perspectives, American Economic Association, vol. 28(1), pages 147-166, Winter.
    5. Anton Bekkerman & Eric J. Belasco & Vincent H. Smith, 2019. "Does Farm Size Matter? Distribution of Crop Insurance Subsidies and Government Program Payments across U.S. Farms," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(3), pages 498-518, September.
    6. Gerlt, Scott & Thompson, Wyatt & Miller, Douglas, 2014. "Exploiting the Relationship between Farm-Level Yields and County-Level Yields for Applied Analysis," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 39(2), pages 1-18.
    7. repec:fip:fedkrw:rwp2013-07 is not listed on IDEAS
    8. Sharma, S. & Walters, C., 2018. "Influence of Farm and Lease Type on Crop Insurance Returns," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277399, International Association of Agricultural Economists.
    9. Jason Brown & John Pender & Jeremy G. Weber, 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.
    10. He, Xi, 2018. "Bigger Farms and Bigger Food Firms-The Agricultural Origin of Industrial Concentration in the Food Sector," 2018 Annual Meeting, August 5-7, Washington, D.C. 274206, Agricultural and Applied Economics Association.
    11. Congressional Budget Office, 2017. "Options to Reduce the Budgetary Costs of the Federal Crop Insurance Program," Reports 53375, Congressional Budget Office.
    12. Ifft, Jennifer & Patrick, Kevin & Novini, Amirdara, 2014. "Debt Use By U.S Farm Businesses, 1992-2011," Economic Information Bulletin 165912, United States Department of Agriculture, Economic Research Service.

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    Keywords

    Agricultural and Food Policy; Agricultural Finance; Industrial Organization; Public Economics;
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