Farm Household Income and Distribution of Government Payments. Center for Food and Agricultural Business Purdue University
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1 Farm Household Income and Distribution of Government Payments
2 Overview of Research 2.1 Million Farms in the U.S. Different types of farm households Labor allocations/income sources Consumption patterns Investment behavior Examine USDA ARMS data to identify different types of farm households Non-farm groups Single income ruralpolitans (SIR), Double income ruralpolitans (DIR), Active Seniors (AS Farm groups Farm Operator with Spouse Working off Farm (FOSO), Traditionals (TRAD), Commercial (COMM)
3 Topics Today Distribution of household income for different household types Implications for farm policy Distribution of government payments among household types Implication for farm policy
4 Distribution of Income Sources for Farm Households
5 U.S. Farm Household Income Sources COMM 9% TRAD 7% FOSO 12% AS 24% DIR 27% SIR 21% Household Net Farm Income Total Spouse Off Farm Wages Total Operator Off Farm Wages Other Non-Farm Income Data Source 2003 Agricultural Resource Management Survey
6 U.S. Farm Household Income Sources: Farms Receiving no Government Payments COMM 3% TRAD 3% FOSO AS 1 DIR 18% SIR 15% Household Net Farm Income Govt. Pmts. Total Operator Off Farm Wages Total Spouse Off Farm Wages Other Non-Farm Income Data Source 2003 Agricultural Resource Management Survey
7 U.S. Farm Household Income Sources: Farms Receiving Government Payments COMM TRAD 5% FOSO AS 8% DIR SIR 8% Household Net Farm Income Total Spouse Off Farm Wages Data Source 2003 Agricultural Resource Management Survey Total Operator Off Farm Wages Other Non-Farm Income
8 U.S. Farm Household Income Sources: Farms Receiving Government Payments COMM TRAD 5% FOSO AS 8% DIR SIR 8% Household Net Farm Income Govt. Pmts. Total Operator Off Farm Wages Total Spouse Off Farm Wages Other Non-Farm Income Data Source 2003 Agricultural Resource Management Survey
9 U.S. Farm Household Income Sources: Farms Receiving Government Payments COMM TRAD 5% FOSO AS 8% DIR SIR 8% Household Net Farm Income Total Spouse Off Farm Wages Total Operator Off Farm Wages Other Non-Farm Income Data Source 2003 Agricultural Resource Management Survey
10 Distribution of Government Payments for Farm Households
11 Distribution of government payments by program type 35% Direct 30% Counter-cyclical, ldp, mlg 25% 20% 15% 10% 5% 0% SINGLE INCOME RURALPOLITAN ACTIVE SENIOR DOUBLE INCOME RURALPOLITAN TRADITIONAL FARM COMMERCIAL FARM FARM OPERATOR SPOUSE WORKING OFF Non-family farms Percent of total payments
12 Distribution of government payments by program type 35% 30% Conservation Direct Counter-cyclical, ldp, mlg 25% Percent of total payments 20% 15% 10% 5% 0% SINGLE INCOME RURALPOLITAN ACTIVE SENIOR DOUBLE INCOME RURALPOLITAN TRADITIONAL FARM COMMERCIAL FARM FARM OPERATOR SPOUSE WORKING OFF FARM Non-family farms Data Source 2003 Agricultural Resource Management Survey
13 Ratio of Govt. Pmt. Received to Acres Planted SIR AS DIR FOSO TRAD COMM CORP Crop Subsidy
14 Ratio of Govt. Pmt. Received to Acres Planted SIR AS DIR FOSO TRAD COMM CORP CRP/WRP
15 Ratio of Govt. Pmt. Received to Acres Planted SIR AS DIR FOSO TRAD COMM CORP Overall Data Source 2003 Agricultural Resource Management Survey
16 Some Observations Income sources of farm household are very diverse Generally resourceful group that is using talents in the marketplace Some within these groups have limited opportunities to diversify income; are they the target for future farm policy? Government payment distribution depends on how you ask the question 61% of farm households do not receive government payments Of the 39% that do receive payments, traditional crop subsidies appear to be targeted to the farm groups, while much of the environmental spending appear to target the nonfarm groups
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