Sen. Kent Conrad (D-N.D.) Breaks Down Farm Payment Receipts

December 11, 2007

Excerpt from a Dec. 11 Statement on the Senate Floor

The critics say only 43 percent of all farms received payments. The critics say that 57 percent of farms unfairly operate without a safety net. The critics say the largest 8 percent of all farms receive 58 percent of the farm program benefits.

<[Such statements] don’t come close to telling the whole story. In fact, taken alone, I think they completely misrepresent the reality of the farm program. Let’s look at each of these claims in turn.

According to the Economic Research Service, farming operations receiving no Government payments had an average household income of over $77,000 per year. But the farm income portion of that was only $1,000. So when the assertion is made that almost half of the farms get no farm program benefits, guess what. Those people are not farmers…

What this tells me about the 57 percent of farms operating without a safety net is that a big chunk of them aren’t much into farming at all. The largest portion of them farmed only marginally, or do so as a hobby…

Part of the problem is the way farmers are defined for statistical purposes. To quote from the Economic Research Service: “Most establishments classified as farms are too small to support a household because the official U.S. farm definition requires only $1,000 of sales to qualify as a farm.”

So the first criticism we hear is without merit. I would like to think of farm households as those that actually obtain a significant portion of their income from a farming operation. When you look at those households, you get a completely different picture…

If you look at all of the farms with gross farm receipts above $50,000, you will see that only 23 percent of roughly 2 million total farms are responsible for 90 percent of farm receipts. But their share of Government payments is actually somewhat less, totaling just over 81 percent.

[Farmers], with sales less than $50,000, constitutes nearly 77 percent of farms, but produces about 10 percent of gross farm receipts. Yet their share of Government payments is nearly double their percentage of those gross receipts. Let me emphasize that: 77 percent of farms, as tallied by the USDA, are below $50,000 in receipts. They do about 10 percent of the production and get a disproportionate share of the benefits…

When you drill deeper into the data, farms with receipts of less than $10,000 constitute 58 percent of total farm numbers. Yet they produce less than 4 percent of total farm production and still receive 7 percent of Government payments.

So the conclusion one reaches, if one actually examines these data, is totally different than the story being told by the critics…

To the extent there are farming operations that don’t participate and yet provide a great deal of sales, this farm bill seeks to help them through investments in specialty crop agriculture and a broad-based disaster assistance program. But to suggest that the vast majority of farms are being mistreated by the farm program is simply false. It is not true; it is not fair; it is not accurate. In fact, the smallest producers get a bigger share of Government payments relative to receipts than do the largest producers.

Editor’s note: To read the full speech in the Congressional Record, use this link.

To view floor charts used during the Conrad speech (pdf), use this link. or online slide show.

Percent of Farms Gross Govt Payments Combined