Sunday, September 12, 2010

U.S. Government Farm Payments Breakdown

source: usda

U.S. Farm Payments by Type and Size of Farm

Commodity programs target specific commodities, largely feed and food grains, cotton, and oilseeds. Payments are tied to the amount of cropland enrolled in programs and yield histories. Specialty crops (except dry peas, lentils, and chickpeas) and livestock (except dairy, wool, mohair, and honey) are not supported by traditional commodity programs.

Producers of nonprogram commodities—as well as producers of program commodities—may also receive disaster assistance and occasional ad hoc payments. Farms producing nonprogram commodities may receive substantial payments if they also produce program commodities or did so in the past.

U.S. Government Payments by Farm Type

source: usda

About three-fourths of medium-sales farms and large-scale farms receive commodity-related payments, summing the share receiving only commodity related payments and the share receiving both commodity-related and conservation payments. These farms collectively received 76 percent of commodity program benefits paid to farmers in 2007, roughly proportional to their production of program crops. Very large family farms alone received 45 percent of commodity-related payments.

Commodity-related payments in total are much larger than conservation payments, accounting for 75 percent of all Government payments made to farmers in 2007. Commodity-related payments also make up a large majority of Government payments in each farm type, with the exceptions of retirement and residential/lifestyle farms. Commodity-related payments account for slightly less than half of total payments on residential/lifestyle farms and just over a quarter on retirement farms.

U.S. Farm Payments: Conservation vs. Commodity

source: usda

Conservation Programs
The four USDA land-retirement programs—CRP, CREP, WRP, and FWP—together make up 78 percent of all conservation payments paid to farms. The CRP is the largest land-retirement program by far, accounting for 74 percent of conservation payments by itself. Another 22 percent of conservation payments come from working-land programs: the Environmental Quality Incentives Program (EQIP) and the Conservation Security Program (CSP). EQIP and CSP have expanded in recent years, but they still make up only 15 and 7 percent, respectively, of conservation payments in the 2007 ARMS.

The distribution of working-land payments between small and large-scale family farms is similar to that of commodity-related payments, with about three-fifths of the payments going to large-scale farms. Both types of programs—directly or indirectly—target production:

• Production of specific commodities, in the case of commodity-related
• Environment problems on land in production, in the case of workingland

The target of land-retirement programs, however, is environmentally sensitive land to remove from production, so the distribution of conservation payments differs from those of commodity-related payments or working-land payments. Retirement, residential/lifestyle, and low-sales farms received 73 percent of land-retirement payments in 2007, reflecting their large numbers (84 percent of all farms), their large share of farmland (51 percent of the land owned by farms), and their tendency to enroll large shares of their land in land-retirement programs when they do participate.

Enrollments in land retirement programs account for 54 percent of the land operated on participating retirement farms, 40 percent on participating residential/lifestyle farms, and 27 percent on participating low-sales farms. In contrast, enrollment ranges from 5 percent to 12 percent for participating medium-sales farms and large-scale farms.

The main occupation of residential/lifestyle operators is off the farm, which limits the amount of time they can spend farming. Since acreage enrolled in land-retirement programs requires little labor or capital investment and provides a guaranteed income stream, residential/lifestyle farmers may find the programs financially attractive, particularly if their farms are not profitable. Given their age, many retired farmers and older farmers on low-sales operations have land available to put into conservation uses.

source: usda [pdf]