U.S. farm dynamics and the distribution of U.S. agricultural subsidies

ABSTRACT

The persistent instability of the agricultural sector is the fundamental premise of most agricultural policy. Yet no research has ever quantified the aggregate dynamics of individual farms in the US. This article is the first to combine the US Census of Agriculture with the Agricultural Resource Management Survey to observe the dynamics of nearly 1.5 million farms. The data reveal substantial variation in farm size expansion and contraction. Most of this variation is unobservable in the sector totals reported by the US Department of Agriculture each year. The distribution of agricultural subsidies suggests that subsidies become more important as farms get smaller and may play a role in slowing farm size contraction.

KEYWORDS:

• Agricultural subsidies
• farm dynamics
• agricultural policy
• subsidy distribution
• farm growth

JEL CLASSIFICATION:

• Q12
• Q18
• L11

Acknowledgement

I thank Jameson Burt for his assistance accessing the data.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

¹ Author’s calculation from the 1920 US Census of Agriculture.

² Author’s calculation from the 2007 US Census of Agriculture.

³ The National Commission on Small Farms selected $250 000 in gross sales as the cut-off between small- and large-scale farms.

⁴ Figure 1 includes ‘Limited Resource’ farms, which the Census of Agriculture defines as ‘farms with sales less than $100,000 and operator household income less than $20,000’ (Hoppe and Banker 2010). This category is somewhat inconsistent with the rest of the typology because it ignores the farm operator’s primary occupation. Consequently, the USDA-ERS has eliminated the Limited Resource category from the farm typology.