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

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.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,