For other versions of this document, see http://wikileaks.org/wiki/CRS-RL32590
------------------------------------------------------------------------------
Order Code RL32590
CRS Report for Congress
Received through the CRS Web
Average Farm Subsidy Payments, by State, 2002
September 16, 2004
Jasper Womach
Specialist in Agricultural Policy
Resources, Science, and Industry Division
Congressional Research Service ~ The Library of Congress
Average Farm Subsidy Payments, by State, 2002
Summary
The U.S. Department of Agriculture makes direct subsidy payments through the
Commodity Credit Corporation to farmers for commodity price and income support,
certain conservation and environmental activities, and some disaster losses. In 2002,
these direct farm subsidy payments amounted to $12.151 billion.
This report examines the distribution of these payments among states, calculates
the average size of payments going to recipient farms in each state, and distinguishes
between payments received by farm operators and landlords. This information is
intended to aid in policy debates about subsidizing some farms but not others,
changing per-person payment limits, and the altering eligibility rules for landlords to
receive payments.
More money went to Texas ($1.2 billion) than any other state. Texas along with
the next 10 leading states received 56% of total farm subsidy payments. These states
were largely concentrated in the nation's central farm belt, where much of the
subsidized corn, soybeans, wheat, cotton, and rice are produced. Also ranking high
were California (due to cotton and rice) and Georgia (due to peanuts).
The subsidy payments were made to the operators and landlords of 707,596
farms (one-third of all farms in the nation). However, in some states a much higher
proportion of the farms were subsidized (e.g., North Dakota, 78%, and Iowa, 70%).
On average, the payments amounted to $17,172 per subsidized farm. The range
was from a low of $3,401 per subsidized farm in West Virginia to a high of $90,214
per subsidized farm in California. Farm operators received an average of $9,251
each and landlords received an average of $5,617 each.
Data on state averages obscure the high concentrations of payments to a
relatively small proportion of the farms receiving subsidies. While there were a total
of 1,705,514 separate "persons" that received payments in 2002, 50% of the subsidy
payments went to 85,358 persons (or just 5% of the recipients).
This report is intended as a reference and informational resource and is not
expected to be regularly updated.
Contents
Farm Subsidy Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
State-By-State Distribution of Total Farm Subsidy Payments . . . . . . . . . . . . 7
Farms Receiving Subsidy Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Subsidy Payments per Farm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Subsidy Payments to Farm Operators and Landlords . . . . . . . . . . . . . . . . . 19
Concentration of Farm Subsidy Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 27
List of Figures
Figure 1. Total Farm Subsidy Payments, 1996-2002 . . . . . . . . . . . . . . . . . . . . . . 2
Figure 2. Farm Subsidy Payments by Major Category, 2002 . . . . . . . . . . . . . . . . 3
Figure 3. Total Farm Subsidy Payments in 2002 . . . . . . . . . . . . . . . . . . . . . . . . . 8
Figure 4. Percentage of Farms Receiving Subsidies in 2002 . . . . . . . . . . . . . . . 12
Figure 5. Average Subsidy Payment per Farm in 2002 . . . . . . . . . . . . . . . . . . . 16
Figure 6. Average Number of Landlords per Farm Receiving Subsidies
in 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
List of Tables
Table 1. Farm Subsidy Payments, by Program, 2002 . . . . . . . . . . . . . . . . . . . . . . 5
Table 2. Commodity Subsidy Payments, by Commodity, 2002 . . . . . . . . . . . . . . 6
Table 3. Subsidy Payments to Farm Operators and Landlords, by State, 2002 . . 9
Table 4. Proportion of Farms Receiving Subsidy Payments, by State, 2002 . . . 13
Table 5. Total Subsidy Payments Per Farm, by State, 2002 . . . . . . . . . . . . . . . . 17
Table 6. Subsidy Recipients Per Farm, by State, 2002 . . . . . . . . . . . . . . . . . . . . 21
Table 7. Average Subsidy Payments to Farm Operators, by State, 2002 . . . . . . 23
Table 8. Average Subsidy Payments to Landlords, by State, 2002 . . . . . . . . . . . 25
Table 9. Farm Subsidy Payments Reach a Large Number of Recipients,
But Most of the Money Goes to a Few . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Average Farm Subsidy Payments,
by State, 2002
Most federal farm subsidies are made as mandatory direct payments to
producers from the U.S. Department of Agriculture's (USDA's) Commodity Credit
Corporation (CCC).1 These include commodity price and income support programs,
certain conservation programs, and select disaster assistance programs. CCC direct
payments to farmers in 2002 are examined in this report.2
The primary data sources are the 2002 Census of Agriculture (available at
[http://www.nass.usda.gov/census/]) and the Environmental Working Group's
(EWG's) Farm Subsidy Database (available at [http://ewg.org/farm/home.php]).
The EWG database is a compilation from CCC payment information supplied by
USDA's Farm Service Agency (FSA). FSA's national network of county offices
administers the subsidy programs and writes the CCC checks to the subsidy
recipients.3 These two data sets facilitate a state-by state examination of payments
and the division of payments between farm operators and landlords.
There is unpredictability about the timing and size of market price movements
as well as natural disasters. Consequently, the size of farm subsidies varies from year
to year. Figure 1 shows that from 1995 through 2002 annual farm subsidy payments
ranged from a low of $7.2 billion to a high of $23.5 billion, averaging $14.5 billion
annually over the eight-year period.4 Commodity price and income support accounts
1
The term mandatory means that the payments are not dependent on annual congressional
appropriations. Payment obligations to farmers meeting the rules of the various subsidy
programs are covered by the CCC. The CCC uses its borrowing authority to obtain needed
funds from the U.S. Treasury. Later, Congress appropriates monies to reimburse the CCC,
so it can repay the Treasury.
2
The USDA does administer other farm subsidy programs that are not financed through the
CCC and are not examined in this report. Among these are crop insurance (costing about
$2 billion annually in premium subsidies), and farm ownership and operating loans for
limited resource farmers (costing nearly $200 million annually in loan subsidies).
3
The data obtained by EWG are developed in FSA county offices and pertain to the farm
in the county and not the address of the recipient. Recipients are unduplicated but may
receive multiple payments from multiple programs throughout the year. Generally, data
pertain to the calendar year of payment, but there may be exceptions.
4
The data reported by EWG for 2002 may include a combination of calendar year and crop
year data, but are characterized by EWG as calendar year payments. The EWG data shown
in Figure 1 differ only slightly from calendar year direct payment data published by USDA's
Economic Research Service. The ERS payment numbers for 1995 through 2002 are $7.3
billion, $7.3 billion, $7.5 billion, $12.4 billion, $21.5 billion, $22.9 billion, $20.7 billion,
$11.0 billion. The CCC maintains its most detailed accounts by fiscal year, but these
(continued...)
CRS-2
for most farm subsidy payments. As shown in Figure 2, commodity payments
amounted to 73% of CCC's total farm subsidy payments in 2002.
The year 2002, with total farm subsidy payments of $12.151 billion, was
selected for examination in this report because of data availability. At the same time,
it is fairly close to annual average total payments from 1995 through 2002. However,
2002 is unique in that peanut producers received one-time quota buyout payments of
about $1 billion. Nearly half the peanut quota buyout payments were concentrated
in Georgia ($483 million), with the remainder divided largely among Texas ($153
million), Alabama ($150 million), North Carolina ($107 million), Virginia ($67
million), Oklahoma ($62 million), and Florida ($48 million).5
Figure 1. Total Farm Subsidy Payments, 1996-2002
4
(...continued)
records do report payments at the state or recipient level. Data from the 2002 Census of
Agriculture are for calendar year 2002.
5
A full description of the peanut marketing quota buyout program is available in CRS
Report RL30924, Peanut Program Policy Issues.
CRS-3
Figure 2. Farm Subsidy Payments by Major Category, 2002
CRS-4
Farm Subsidy Programs
Most commodity support program payments are linked to market prices.6 When
market prices decline, commodity support payments increase in order to support the
income of producers whose revenue otherwise would decline. Conservation
payments are made to encourage farmers to remedy environmental problems.
Disaster assistance is provided when crop and livestock production is substantially
damaged or destroyed by natural disasters such as drought, flood, and disease,
thereby reducing revenue and/or increasing the expenses of producers.7
Table 1 presents a program-by-program list of payments in 2002. Some of the
payments (and refunds) shown in Table 1 were authorized by the 1996 farm bill,
which originally covered the 1996 through 2002 crops. The 2002 farm bill (P.L. 107-
171, the Farm Security and Rural Investment Act of 2002) was enacted on May 13,
2002, and was made immediately applicable to 2002 crops. So, 2002 was a year of
transition from the previous Production Flexibility Contract Payments to the new
Direct and Counter-Cyclical Payments. Also, Counter-Cyclical Payments became
the permanent replacement for ad hoc Market Loss Payments.
6
Production Flexibility Contract Payments and decoupled Direct Payments for grain and
cotton producers are exceptions. These payments were based on historical production of
each of the grain and cotton crops only. Recipients of these payments were able to change
their mix of crops or even produce nothing.
7
Eligibility requirements for payments are specified in the law for each program. The
payment triggers and size of commodity support payments are based upon specified price
levels (an indirect income test) or physical damage levels for disaster assistance (a loss test).
CRS-5
Table 1. Farm Subsidy Payments, by Program, 2002
Subsidy Number of Payment Per
Program / Category Payments Recipients Recipient
Total Farm Subsidies $12,150,563,185 1,705,514 $7,124
Commodity Subsidies $8,831,971,671 1,319,110 $6,695
Production Flexibility Contract
Payments $3,499,997,512 1,145,725 $3,055
Loan Deficiency Payments (LDPs) $1,296,591,777 334,659 $3,874
Peanut Quota Buyout and
Miscellaneous Payments $1,174,674,015 130,516 $9,000
Commodity Certificates $940,785,178 17,972 $52,347
Dairy Payments $848,186,106 71,968 $11,786
Direct and Counter-Cyclical Payments $570,589,219 210,540 $2,710
Marketing Loan Gains $458,385,698 55,588 $8,246
Lamb Payments $32,401,797 17,210 $1,883
Market Loss Assistance, Non-
Supported Commodities $5,509,671 18,051 $305
Livestock Indemnity Program $3,173,145 2,099 $1,512
Market Loss Assistance, Supported
Commodities $1,417,765 1,287 $1,102
Total LDP-like Grazing Payments $480,947 442 $1,088
Oilseed Program $234,989 360 $653
Wool and Mohair Payments -$16,025 1 -$16,025
Deficiency Payments -$440,125 456 -$965
Conservation Programs $1,991,020,798 429,684 $4,634
Conservation Reserve Program $1,807,458,649 397,707 $4,545
Environmental Quality Incentives
Program $118,268,708 23,585 $5,015
Emergency Conservation Program $38,610,984 13,580 $2,843
Wetlands Reserve Program $17,238,484 678 $25,425
Miscellaneous Conservation Payments $8,811,436 1,839 $4,791
Agricultural Conservation Program $631,544 175 $3,609
Disaster Programs $1,327,570,716 469,165 $2,830
Crop Disaster Payments $1,324,095,908 469,068 $2,823
Karnal Bunt Programs $3,044,719 241 $12,634
Livestock Disaster / Emergency $431,298 182 $2,370
Tree Assistance Programs -$216 1 -$216
Source: Environmental Working Group, Farm Subsidy Database, United States: Subsidy Summary,
Subsidy Detail, [http://www.ewg.org:16080/farm/regiondetail.php?fips=00000&summlevel=2].
Note: There is overlap of recipients across programs. For example, nearly all recipients of loan
deficiency payments also were recipients of production flexibility contract payments. Similarly, many
of the recipients of conservation reserve program payments also were recipients of production
flexibility contract payments. On average, each individual recipient of farm subsidies received
payments related to 1.71 separate programs.
Negative numbers represent reimbursements from farmers for excessive or disqualified payments.
CRS-6
It often is more helpful to examine commodity support payments by commodity
rather than program. Farmers individually tend to specialize in certain commodities
and this relates to the climate and soil conditions favored by the different
commodities. In the absence of irrigation, corn and soybeans grow especially well
in Iowa, Illinois, and surrounding states. Irrigation has made Texas and California
leading cotton states, but production remains large in Mississippi, Georgia, and
Arkansas. Rice, also, is a southern crop, with Arkansas the leading producer, while
irrigation has moved California into second place. Wheat tolerates low rainfall and
low humidity, and so is produced primarily in North Dakota, Kansas, Montana,
Oklahoma, and Washington. Georgia dominates peanut production, but Texas is
second with large irrigated acreage. Table 2 presents the commodity support data
by commodity.
Table 2. Commodity Subsidy Payments, by Commodity, 2002
Number of Payment Per
Commodity Total Payments Recipients Recipient
Total Commodity
Subsidies $8,831,971,671 1,319,110 $6,695
Corn $1,981,564,489 858,077 $2,309
Cotton $1,669,746,908 127,582 $13,088
Peanuts $1,092,846,187 63,139 $17,309
Rice $1,073,167,886 34,888 $30,760
Wheat $975,272,805 750,825 $1,299
Dairy $848,347,339 71,976 $11,787
Soybeans $670,801,852 250,622 $2,677
Sorghum $188,981,974 312,031 $606
Barley $82,801,044 182,657 $453
Apples $74,334,966 6,469 $11,491
Sugar $44,288,049 5,109 $8,669
Sheep meat $32,401,797 17,210 $1,883
Sunflower seed $6,518,597 5,910 $1,103
Oats $6,226,386 345,197 $18
Tobacco $4,990,960 17,623 $283
Safflower seed $1,885,304 1,037 $1,818
Source: Environmental Working Group, Farm Subsidy Database, United States Summary, 2002
[http://www.ewg.org/farm/region.php?fips=00000&progcode=total&yr=2002]
Note: There is overlap of recipients across commodities. For example, many recipients of corn
subsidies also were recipients of soybean subsidies.
CRS-7
State-By-State Distribution of
Total Farm Subsidy Payments
Figure 3 and Table 3 show the geographic distribution of $12.151 billion in
total subsidy payments. Predictably, the farm states in the agricultural heartland of
the country from the Canadian border to the Gulf of Mexico received most of the
subsidy payments. The state receiving the largest amount was Texas, with nearly
$1.209 billion, followed by Iowa, Georgia, Arkansas, California, Illinois, and
Nebraska, each receiving over $500 million.
There were 2.129 million farms in the United States in 2002 according to the
2002 Census of Agriculture, which defines a farm as producing and selling $1,000
or more in agricultural products. The state with the largest number of farms was
Texas (about 229,000), followed by Missouri (about 107,000). Not all farms in the
nation received subsidy payments. Eligibility is linked to the production of certain
commodities or to the adoption of certain conservation practices.
Commodities that received mandatory federal price and income support
payments included wheat, corn, sorghum, barley, oats, rice, cotton, soybeans,
sunflower seed, rapeseed, canola, safflower, flaxseed, mustard seed, crambe, sesame
seed, peanuts, dry peas, lentils, small chickpeas, milk, sugar, wool, mohair, honey,
and tobacco. Major categories of commodities are not supported, including fruits,
vegetables, tree nuts, livestock meat, greenhouse and nursery crops, and hay and
forage crops. Farm cash receipts from sales of supported commodities amounted to
about $53 billion in 2002, or 28% of the $193 billion in national total commodity
cash receipts in 2002.8 Some commodities not receiving mandatory support received
disaster assistance and ad hoc market loss assistance payments in 2002.
8
Calculated from USDA, Economic Research Service, data on farm cash receipts.
CRS-8
Figure 3. Total Farm Subsidy Payments in 2002
Million $ $0-$100M $101-$400M $400M-$1,200M
Based on Environmental Working Group, Farm Subsidy Database.
Farm subsidy payments in 2002 totaled $12.151 billion, of which:
! Commodity support payments totaled $8.832 billion, including:
-- Corn, $1.982 billion
-- Cotton, $1.670 billion
-- Peanuts, $1.092 billion
-- Rice, $1.073 billion
-- Wheat, $0.975 billion
-- Soybeans, $0.671 billion
! Conservation payments totaled $1.991 billion, including:
-- Conservation Reserve Program payments of $1.807
! Disaster payments totaled $1.328 billion.
The top 11 states received $6.844 billion in farm subsidy payments (56.3% of
the U.S. total):
! Texas, $1,209 million (9.9%)
! Iowa, $740 million (6.1%)
! Georgia, $661 million (5.4%)
! Arkansas, $660 million (5.4%)
! California, $652 million (5.4%)
! Illinois, $615 million (5.1%)
! Nebraska, $539 million (4.4%)
! Minnesota, $468 million (3.8%)
! Kansas, $457 million (3.8%)
! Mississippi, $438 million (3.6%)
! Missouri, $406 million (3.3%)
CRS-9
Table 3. Subsidy Payments to Farm Operators and Landlords,
by State, 2002
Rank State Payments to Payments to Total Payments
Operators Landlords
Share of Share of Share of
Total Total US Total
(million $) (%) (million $) (%) (million $) (%)
All States $6,545.7 54% $5,604.9 46% $12,150.6 100.0%
1 Texas $529.0 44% $680.0 56% $1,208.9 9.9%
2 Iowa $538.9 73% $201.1 27% $740.0 6.1%
3 Georgia $118.5 18% $542.1 82% $660.7 5.4%
4 Arkansas $238.6 36% $421.3 64% $659.9 5.4%
5 California $168.7 26% $483.4 74% $652.1 5.4%
6 Illinois $412.6 67% $202.5 33% $615.1 5.1%
7 Nebraska $347.5 64% $191.7 36% $539.2 4.4%
8 Minnesota $350.7 75% $116.8 25% $467.5 3.8%
9 Kansas $328.2 72% $128.6 28% $456.8 3.8%
10 Mississippi $145.5 33% $292.3 67% $437.8 3.6%
11 Missouri $264.5 65% $141.4 35% $405.9 3.3%
12 North Dakota $293.1 76% $90.6 24% $383.6 3.2%
13 Indiana $224.7 67% $110.2 33% $334.9 2.8%
14 South Dakota $215.1 64% $119.5 36% $334.6 2.8%
15 Wisconsin $247.9 75% $84.5 25% $332.4 2.7%
16 North Carolina $97.7 30% $226.2 70% $323.9 2.7%
17 Oklahoma $149.9 47% $167.3 53% $317.2 2.6%
18 Alabama $77.9 27% $211.3 73% $289.2 2.4%
19 Ohio $197.4 70% $83.6 30% $281.0 2.3%
20 Louisiana $123.6 47% $139.1 53% $262.7 2.2%
21 Montana $210.7 80% $51.2 20% $261.9 2.2%
22 Washington $133.8 62% $82.0 38% $215.7 1.8%
23 Colorado $125.8 60% $85.0 40% $210.8 1.7%
24 Michigan $144.8 76% $45.9 24% $190.7 1.6%
25 Virginia $54.7 30% $127.3 70% $181.9 1.5%
26 Idaho $93.9 57% $71.5 43% $165.4 1.4%
27 New York $110.2 69% $49.1 31% $159.4 1.3%
28 Tennessee $59.2 41% $86.5 59% $145.7 1.2%
29 Kentucky $94.1 68% $44.2 32% $138.3 1.1%
30 Pennsylvania $85.8 66% $44.4 34% $130.2 1.1%
31 Florida $21.8 26% $61.1 74% $82.9 0.7%
32 Oregon $52.1 65% $28.1 35% $80.2 0.7%
33 New Mexico $50.2 68% $24.1 32% $74.3 0.6%
34 Arizona $31.8 45% $38.5 55% $70.2 0.6%
35 Wyoming $37.9 57% $28.2 43% $66.1 0.5%
36 South Carolina $38.4 59% $27.0 41% $65.4 0.5%
CRS-10
Rank State Payments to Payments to Total Payments
Operators Landlords
Share of Share of Share of
Total Total US Total
(million $) (%) (million $) (%) (million $) (%)
37 Utah $26.7 49% $27.6 51% $54.3 0.4%
38 Maryland $33.1 68% $15.8 32% $49.0 0.4%
39 Vermont $24.4 67% $12.1 33% $36.4 0.3%
40 Maine $8.7 63% $5.1 37% $13.7 0.1%
41 Delaware $8.6 72% $3.3 28% $11.9 0.1%
42 Nevada $4.3 38% $7.1 62% $11.4 0.1%
43 New Jersey $4.4 69% $2.0 31% $6.5 0.1%
44 Massachusetts $4.3 70% $1.8 30% $6.1 0.0%
45 West Virginia $5.2 91% $0.5 9% $5.7 0.0%
46 Connecticut $3.7 74% $1.3 26% $4.9 0.0%
47 New Hampshire $3.8 103% -$0.1 -3% $3.7 0.0%
48 Hawaii $0.9 46% $1.0 54% $1.9 0.0%
49 Alaska $1.8 99% $0.0 1% $1.8 0.0%
50 Rhode Island $0.5 81% $0.1 19% $0.7 0.0%
Source: Data on subsidy payments to farm operators are based on payments to farms reported in the
2002 Census of Agriculture. Data on total subsidy payments are from the Environmental Working
Group, Farm Subsidy Database. Payments to non-operator recipients are calculated as the difference
between total payments and payments to operators.
CRS-11
Farms Receiving Subsidy Payments
Of the nation's 2.1 million farms, 707,596 (33%) received subsidy payments
and 1,421,386 (67%) did not receive payments in 2002. Figure 4 and Table 4 show
the percentage of farms in each state that received payments in 2002. In North
Dakota, 78% of farms received subsidy payments, followed by Iowa, Illinois,
Nebraska, South Dakota, Kansas, and Minnesota, each with payments going to more
than half the farms in the state. This concentration reflects the specialization of
farms in these states in the production of subsidized feed grains, oilseeds, and wheat.
Generally the other states proportionally have more livestock and specialty crops that
do not receive price support.
CRS-12
Figure 4. Percentage of Farms Receiving Subsidies in 2002
Percent of All Farms 0%-19% 20%-49% 50%-78%
Based on data from USDA, 2002 Census of Agriculture
Nationally, 33% of farms received subsidies (707,596 farms out of 2,128,982).
More than 50% of the farms in each of seven states received subsidies in 2002.
This proportion of subsidized farms reflects highly concentrated production of wheat,
corn, and/or soybeans by most farms in these state. These states were:
! North Dakota (78%)
! Iowa (70%)
! Illinois (66%)
! Nebraska (65%)
! South Dakota (64%)
! Kansas (61%)
! Minnesota (54%)
CRS-13
Table 4. Proportion of Farms Receiving Subsidy Payments,
by State, 2002
Farms w/ Share of Farms
Rank State All Farms Subsidies w/ Subsidies (%)
All States 2,128,982 707,596 33%
1 North Dakota 30,619 23,892 78%
2 Iowa 90,655 63,074 70%
3 Illinois 73,027 47,857 66%
4 Nebraska 49,355 32,007 65%
5 South Dakota 31,736 20,259 64%
6 Kansas 64,414 39,191 61%
7 Minnesota 80,839 43,927 54%
8 Wisconsin 77,131 37,234 48%
9 Indiana 60,296 26,841 45%
10 Montana 27,870 12,389 44%
11 Missouri 106,797 43,379 41%
12 Ohio 77,797 28,851 37%
13 Michigan 53,315 18,133 34%
14 Wyoming 9,422 3,163 34%
15 Colorado 31,369 10,163 32%
16 Georgia 49,311 15,510 31%
17 Mississippi 42,186 12,383 29%
18 Oklahoma 83,300 24,316 29%
19 Alabama 45,126 12,863 29%
20 Idaho 25,017 7,098 28%
21 Maryland 12,198 3,372 28%
22 Louisiana 27,413 7,562 28%
23 New York 37,255 9,896 27%
24 Kentucky 86,541 22,825 26%
25 Delaware 2,391 617 26%
26 South Carolina 24,541 6,112 25%
27 North Carolina 53,930 12,312 23%
28 New Mexico 15,170 3,246 21%
29 Pennsylvania 58,105 11,991 21%
30 Washington 35,939 7,332 20%
31 Vermont 6,571 1,296 20%
32 Utah 15,282 2,987 20%
33 Virginia 47,606 9,206 19%
34 Texas 228,926 42,217 18%
35 Tennessee 87,595 16,034 18%
36 Maine 7,196 1,244 17%
37 Arkansas 47,483 7,811 16%
38 Nevada 2,989 439 15%
39 Alaska 609 72 12%
40 Arizona 7,294 833 11%
41 Oregon 40,033 4,430 11%
42 New Hampshire 3,363 359 11%
43 California 79,631 7,228 9%
44 West Virginia 20,812 1,675 8%
CRS-14
Farms w/ Share of Farms
Rank State All Farms Subsidies w/ Subsidies (%)
45 Massachusetts 6,075 415 7%
46 Connecticut 4,191 254 6%
47 Rhode Island 858 52 6%
48 New Jersey 9,924 582 6%
49 Florida 44,081 2,554 6%
50 Hawaii 5,398 113 2%
Source: Data on farms and farms receiving subsidies are from the 2002 Census of Agriculture.
CRS-15
Subsidy Payments per Farm
Total subsidy payments of $12.151 billion divided among 707,596 recipient
farms is equal to $17,172 per farm. However, the average by state ranges from
$90,214 per farm in California to $3,401 in West Virginia (see Figure 5 and Table
5). Generally, the states with the largest per-farm payments are those that produce
rice and cotton. Other states receiving the larger per-farm payments in 2002
benefitted from peanut quota buyout payments, disaster payments, and apple market
loss assistance payments.
While each farm has an operator, there may be other individuals associated with
the farm who are eligible to receive subsidy payments. Generally, individuals must
be actively engaged in the farming operation to receive subsidy payments. Actively
engaged means providing a significant contribution of capital, land, or equipment,
as well as a significant contribution of personal labor or active personal management
to the operation. This personal contribution of labor or management must be in
proportion to the share of the farm's profits and losses and it must be at risk. A
landlord receiving crop share rent is likely considered actively engaged while a
landlord receiving cash rent is not actively engaged.9
9
The interpretation and application of the legal requirement concerning the phrase "actively
engaged" was examined in General Accounting Office testimony titled Farm Program
Payments: USDA Should Correct Weaknesses in Regulations and Oversight to Better
Ensure Recipients Do Not Circumvent Payment Limitations before the Senate Committee
on Finance on June 16, 2004 (GAO-04-861T).
CRS-16
Figure 5. Average Subsidy Payment per Farm in 2002
$ per Farm $ 3K-$15K $15K-$30K $30K-$90K
Source: Based on data from USDA, 2002 Census of Agriculture, and Environmental Working
Group, Farm Subsidy Database.
Subsidy payments per farm (among only the farms receiving subsidies) averaged
$17,172 in 2002.
The highest per-farm payments were made in California, Arkansas, and Arizona.
! California ($90,214 per farm) is notable for large rice, cotton, and
dairy farms dominating the farm subsidy payments.
! Arkansas ($84,480 per farm) is the leading rice state, with many of
the rice farms being large. Also, rice cooperatives in Arkansas may
be the initial recipient of payments that are subsequently distributed
among member farms.
! Arizona ($84,329 per farm) is notable for payments to a few, but
large, cotton, dairy, and peanut farms.
! Large per-farm payments in Georgia and Florida reflect peanut quota
buyout payments that were unique to 2002.
! Large per-farm payments in Mississippi reflect payments for
peanuts, rice, cotton, and milk.
! Large per-farm payments in Louisiana reflect payments for rice,
cotton, and milk.
CRS-17
Table 5. Total Subsidy Payments Per Farm,
by State, 2002
Subsidy Per
Farms w/ Total Payments Recipient Farm
Rank State Subsidies (thousand $) (average)
All States 707,596 $12,150,563 $17,172
1 California 7,228 $652,065 $90,214
2 Arkansas 7,811 $659,871 $84,480
3 Arizona 833 $70,246 $84,329
4 Georgia 15,510 $660,662 $42,596
5 Mississippi 12,383 $437,762 $35,352
6 Louisiana 7,562 $262,702 $34,740
7 Florida 2,554 $82,881 $32,451
8 Washington 7,332 $215,736 $29,424
9 Texas 42,217 $1,208,944 $28,636
10 Vermont 1,296 $36,441 $28,118
11 North Carolina 12,312 $323,911 $26,309
12 Nevada 439 $11,378 $25,918
13 Alaska 72 $1,783 $24,766
14 Idaho 7,098 $165,428 $23,306
15 New Mexico 3,246 $74,323 $22,897
16 Alabama 12,863 $289,183 $22,482
17 Montana 12,389 $261,945 $21,143
18 Wyoming 3,163 $66,085 $20,893
19 Colorado 10,163 $210,758 $20,738
20 Virginia 9,206 $181,928 $19,762
21 Connecticut 254 $4,946 $19,472
22 Delaware 617 $11,939 $19,350
23 Utah 2,987 $54,304 $18,180
24 Oregon 4,430 $80,177 $18,099
25 Hawaii 113 $1,911 $16,911
26 Nebraska 32,007 $539,214 $16,847
27 South Dakota 20,259 $334,633 $16,518
28 New York 9,896 $159,377 $16,105
29 North Dakota 23,892 $383,645 $16,057
30 Massachusetts 415 $6,070 $14,627
31 Maryland 3,372 $48,953 $14,517
32 Oklahoma 24,316 $317,194 $13,045
33 Illinois 47,857 $615,111 $12,853
34 Rhode Island 52 $651 $12,519
35 Indiana 26,841 $334,917 $12,478
36 Iowa 63,074 $739,968 $11,732
37 Kansas 39,191 $456,829 $11,656
38 New Jersey 582 $6,476 $11,127
39 Maine 1,244 $13,745 $11,049
40 Pennsylvania 11,991 $130,179 $10,856
41 South Carolina 6,112 $65,358 $10,693
42 Minnesota 43,927 $467,542 $10,644
43 Michigan 18,133 $190,686 $10,516
CRS-18
Subsidy Per
Farms w/ Total Payments Recipient Farm
Rank State Subsidies (thousand $) (average)
44 New Hampshire 359 $3,701 $10,308
45 Ohio 28,851 $281,031 $9,741
46 Missouri 43,379 $405,873 $9,356
47 Tennessee 16,034 $145,723 $9,088
48 Wisconsin 37,234 $332,425 $8,928
49 Kentucky 22,825 $138,257 $6,057
50 West Virginia 1,675 $5,696 $3,401
Source: Data on the number of farms receiving subsidies are from the 2002 Census of Agriculture.
Data on total subsidy payments are from the Environmental Working Group, Farm Subsidy Database.
CRS-19
Subsidy Payments to Farm Operators and Landlords
There were 1,705,514 separate recipients of farm subsidy payments in 2002,
associated with 707,596 farms. In nearly all cases, the recipients were individual
farm operators and non-operator landlords. However, in some cases the recipients
were legal business entities, such as partnerships, corporations, cooperatives, and
trusts involving more than one individual. In the terminology of the law each of the
farm operators, landlords, or other legal entities is called a "person" and is subject to
limits on the size of payments from subsidy programs.10
A simplifying assumption is made for purposes of this analysis that each of the
707,596 farms receiving subsidy payments has a single operator. It is further
assumed the difference between the 707,596 farm operators and the 1,705,514 total
subsidy recipients (equaling 997,918) are farm landlords.11 For the most part, these
997,918 landlords are the owners of farmland that is rented to operators. Often, the
landlords are relatives of farm operators and neighboring landowners who have left
farming. It is typical for farmland to be owned collectively by the children of a
former farm family, none of whom remains in farming but who continue to retain
ownership of their former family farm.
Given the aforementioned assumption, Figure 6 and Table 6 show the
proportion of landlords to farm operators in each state. On average there were 1.41
landlords receiving subsidy payments for every farm operator who received
payments. However, there was a range among states from 4.05 landlords per
operator in Arizona down to 0.44 in Alaska. Differences between states in the ratio
of farm operators to landlords reflect differing commodity specializations, regional
approaches to farm consolidation, and regional attitudes toward farmland ownership.
Also, annual per-person payment limits create an incentive to add actively engaged
landlords rather than expand the acreage owned by the farm operator.
The national average farm subsidy payment to each farm operator in 2002 was
$9,251, and the average subsidy to each non-operator recipient was $5,617. Since
there were 1.41 off-farm landlords for each farm, the average subsidy per farm to off-
farm landlords was $7,921 (86% of the amount paid to each operator). Table 7
shows the distribution payments to farm operators and Table 8 shows the distribution
of payments to off-farm landlords.
10
See CRS Report RS21779, Grains, Cotton, Oilseeds, and Peanuts: Payments Under the
2002 Farm Bill, for more information on per-person payment limits related to commodity
support programs.
11
To be eligible for commodity payments, a person must be actively engaged in farming.
This can be achieved by providing a significant contribution of capital, land, or equipment,
as well as a significant contribution of personal labor or active personal management to the
operation. Few people qualify for commodity payments who are not operators or landlords.
CRS-20
Figure 6. Average Number of Landlords per Farm
Receiving Subsidies in 2002
Landlords per Farm 0.4-1.2 1.3-2.2 2.3-4.1
Source: Based on data from USDA, 2002 Census of Agriculture, and Environmental Working
Group, Farm Subsidy Database.
The national average number of landlords (non-operator recipients) per farm
that received subsidies in 2002 was 1.41.
! Arizona (4.1) and Louisiana (3.2) had the largest number of
landlords per farm that received subsidies.
! In the northeast and along the northern border of the country there
were more full owner-operators. These states fell below the national
average of 1.41 landlord per farm.
CRS-21
Table 6. Subsidy Recipients Per Farm, by State, 2002
Landlord
All Operator Landlord Recipients
Rank State Recipients Recipients Recipients Per Farm
All States 1,705,514 707,596 997,918 1.41
1 Arizona 4,209 833 3,376 4.05
2 Louisiana 31,889 7,562 24,327 3.22
3 North Carolina 46,599 12,312 34,287 2.78
4 Arkansas 28,758 7,811 20,947 2.68
5 Florida 8,340 2,554 5,786 2.27
6 Kentucky 74,083 22,825 51,258 2.25
7 Tennessee 51,298 16,034 35,264 2.20
8 Alabama 40,477 12,863 27,614 2.15
9 Georgia 46,951 15,510 31,441 2.03
10 Nevada 1,257 439 818 1.86
11 Kansas 111,751 39,191 72,560 1.85
12 Illinois 134,870 47,857 87,013 1.82
13 Virginia 25,375 9,206 16,169 1.76
14 New Mexico 8,916 3,246 5,670 1.75
15 California 19,780 7,228 12,552 1.74
16 Colorado 27,164 10,163 17,001 1.67
17 Indiana 71,615 26,841 44,774 1.67
18 Texas 111,512 42,217 69,295 1.64
19 South Carolina 16,134 6,112 10,022 1.64
20 Idaho 18,505 7,098 11,407 1.61
21 Oklahoma 63,183 24,316 38,867 1.60
22 Washington 18,650 7,332 11,318 1.54
23 Nebraska 78,240 32,007 46,233 1.44
24 Mississippi 29,444 12,383 17,061 1.38
25 Utah 7,063 2,987 4,076 1.36
26 Oregon 10,474 4,430 6,044 1.36
27 Delaware 1,436 617 819 1.33
28 Wyoming 7,360 3,163 4,197 1.33
29 Hawaii 253 113 140 1.24
30 Ohio 64,311 28,851 35,460 1.23
31 Montana 27,591 12,389 15,202 1.23
32 South Dakota 44,982 20,259 24,723 1.22
33 Massachusetts 909 415 494 1.19
34 Missouri 94,784 43,379 51,405 1.19
35 Vermont 2,821 1,296 1,525 1.18
36 Michigan 38,093 18,133 19,960 1.10
37 North Dakota 49,089 23,892 25,197 1.05
38 Maine 2,533 1,244 1,289 1.04
39 Rhode Island 105 52 53 1.02
40 West Virginia 3,297 1,675 1,622 0.97
41 Connecticut 494 254 240 0.94
42 New Jersey 1,129 582 547 0.94
43 Maryland 6,510 3,372 3,138 0.93
44 Iowa 119,308 63,074 56,234 0.89
CRS-22
Landlord
All Operator Landlord Recipients
Rank State Recipients Recipients Recipients Per Farm
45 New Hampshire 643 359 284 0.79
46 New York 17,087 9,896 7,191 0.73
47 Minnesota 75,310 43,927 31,383 0.71
48 Wisconsin 63,345 37,234 26,111 0.70
49 Pennsylvania 19,992 11,991 8,001 0.67
50 Alaska 104 72 32 0.44
Source: Data on the number of subsidy recipients are from the Environmental Working Group, Farm
Subsidy Database. The data on the number of farm operators receiving subsidies are assumed to equal
the number of farms receiving subsidies, which are from the 2002 Census of Agriculture.
CRS-23
Table 7. Average Subsidy Payments to Farm Operators,
by State, 2002
Rank State Operator Payments to Operators
Recipients
Total $ (thousand) $ Per Operator
All States 707,596 $6,545,678 $9,251
1 Arizona 833 $31,760 $38,127
2 Arkansas 7,811 $238,577 $30,544
3 Alaska 72 $1,765 $24,514
4 California 7,228 $168,698 $23,340
5 Vermont 1,296 $24,377 $18,809
6 Washington 7,332 $133,763 $18,244
7 Montana 12,389 $210,749 $17,011
8 Louisiana 7,562 $123,599 $16,345
9 New Mexico 3,246 $50,201 $15,465
10 Connecticut 254 $3,681 $14,492
11 Delaware 617 $8,643 $14,008
12 Idaho 7,098 $93,934 $13,234
13 Texas 42,217 $528,979 $12,530
14 Colorado 10,163 $125,774 $12,376
15 North Dakota 23,892 $293,067 $12,266
16 Wyoming 3,163 $37,913 $11,986
17 Oregon 4,430 $52,085 $11,757
18 Mississippi 12,383 $145,508 $11,751
19 New York 9,896 $110,234 $11,139
20 Nebraska 32,007 $347,517 $10,858
21 New Hampshire 359 $3,823 $10,649
22 South Dakota 20,259 $215,084 $10,617
23 Massachusetts 415 $4,268 $10,284
24 Rhode Island 52 $528 $10,154
25 Nevada 439 $4,322 $9,845
26 Maryland 3,372 $33,131 $9,825
27 Utah 2,987 $26,669 $8,928
28 Illinois 47,857 $412,636 $8,622
29 Iowa 63,074 $538,896 $8,544
30 Florida 2,554 $21,818 $8,543
31 Kansas 39,191 $328,244 $8,375
32 Indiana 26,841 $224,701 $8,372
33 Minnesota 43,927 $350,709 $7,984
34 Michigan 18,133 $144,771 $7,984
35 North Carolina 12,312 $97,696 $7,935
36 Hawaii 113 $886 $7,841
37 Georgia 15,510 $118,535 $7,642
38 New Jersey 582 $4,441 $7,631
39 Pennsylvania 11,991 $85,794 $7,155
40 Maine 1,244 $8,664 $6,965
41 Ohio 28,851 $197,425 $6,843
42 Wisconsin 37,234 $247,942 $6,659
CRS-24
Rank State Operator Payments to Operators
Recipients
Total $ (thousand) $ Per Operator
43 South Carolina 6,112 $38,384 $6,280
44 Oklahoma 24,316 $149,942 $6,166
45 Missouri 43,379 $264,475 $6,097
46 Alabama 12,863 $77,930 $6,058
47 Virginia 9,206 $54,677 $5,939
48 Kentucky 22,825 $94,053 $4,121
49 Tennessee 16,034 $59,231 $3,694
50 West Virginia 1,675 $5,180 $3,093
Source: Operator recipients are assumed to match data on farms receiving subsidies as reported by
the 2002 Census of Agriculture.
CRS-25
Table 8. Average Subsidy Payments to Landlords,
by State, 2002
Rank State Landlord Payments to Landlords
Recipients
Total $ $ Per Landlord
(thousand)
All States 997,918 $5,604,885 $5,617
1 California 12,552 $483,367 $38,509
2 Arkansas 20,947 $421,294 $20,112
3 Georgia 31,441 $542,127 $17,243
4 Mississippi 17,061 $292,254 $17,130
5 Arizona 3,376 $38,486 $11,400
6 Florida 5,786 $61,063 $10,553
7 Texas 69,295 $679,965 $9,813
8 Nevada 818 $7,056 $8,626
9 Vermont 1,525 $12,064 $7,911
10 Virginia 16,169 $127,251 $7,870
11 Alabama 27,614 $211,253 $7,650
12 Hawaii 140 $1,025 $7,321
13 Washington 11,318 $81,973 $7,243
14 New York 7,191 $49,143 $6,834
15 Utah 4,076 $27,635 $6,780
16 Wyoming 4,197 $28,172 $6,712
17 North Carolina 34,287 $226,215 $6,598
18 Idaho 11,407 $71,494 $6,268
19 Louisiana 24,327 $139,103 $5,718
20 Pennsylvania 8,001 $44,385 $5,547
21 Connecticut 240 $1,265 $5,270
22 Maryland 3,138 $15,822 $5,042
23 Colorado 17,001 $84,984 $4,999
24 South Dakota 24,723 $119,549 $4,836
25 Oregon 6,044 $28,092 $4,648
26 Oklahoma 38,867 $167,252 $4,303
27 New Mexico 5,670 $24,122 $4,254
28 Nebraska 46,233 $191,697 $4,146
29 Delaware 819 $3,296 $4,025
30 Maine 1,289 $5,081 $3,942
31 Minnesota 31,383 $116,833 $3,723
32 New Jersey 547 $2,035 $3,720
33 Massachusetts 494 $1,802 $3,648
34 North Dakota 25,197 $90,578 $3,595
35 Iowa 56,234 $201,072 $3,576
36 Montana 15,202 $51,196 $3,368
37 Wisconsin 26,111 $84,483 $3,236
38 Missouri 51,405 $141,398 $2,751
39 South Carolina 10,022 $26,974 $2,691
40 Indiana 44,774 $110,216 $2,462
41 Tennessee 35,264 $86,492 $2,453
CRS-26
Rank State Landlord Payments to Landlords
Recipients
Total $ $ Per Landlord
(thousand)
42 Ohio 35,460 $83,606 $2,358
43 Illinois 87,013 $202,475 $2,327
44 Rhode Island 53 $123 $2,321
45 Michigan 19,960 $45,915 $2,300
46 Kansas 72,560 $128,585 $1,772
47 Kentucky 51,258 $44,204 $862
48 Alaska 32 $18 $568
49 West Virginia 1,622 $516 $318
50 New Hampshire 284 -$122 -$431
Source: Data in this table are tabulated from 2002 Census of Agriculture and Environmental Working
Group, Farm Subsidy Database, data shown elsewhere in this report.
CRS-27
Concentration of Farm Subsidy Payments
Data on average payment per farm operator and the average payment per
landlord mask the fact that payments were concentrated among a comparatively small
proportion of the recipients. Table 9 shows that 85,358 top recipients (5% of all
recipients) received 50% of all payments for an average of $70,523 per recipient.
Included in the very top recipients are a number of cooperatives, corporations, and
trusts that divided the payments among several and sometimes numerous farmers.
In addition, several individuals received multi-million dollar payments, particularly
in conjunction with the peanut quota buyout.
Table 9. Farm Subsidy Payments Reach a Large Number of
Recipients, But Most of the Money Goes to a Few
% of All % of Number of Total Subsidy Average Payment
Recipients Payments Recipients Payments Per Recipient
Top 5% 50% 85,358 $6,019,739,668 $70,523
Next 5% 15% 85,359 $1,865,686,784 $21,857
Next 10% 16% 170,718 $1,970,454,705 $11,542
Remaining 80% 19% 1,365,741 $2,294,682,028 $1,680
All Recipients 100% 1,705,514 $12,150,563,185 $7,124
Source: Environmental Working Group, Farm Subsidy Database.
------------------------------------------------------------------------------
For other versions of this document, see http://wikileaks.org/wiki/CRS-RL32590