Structure and Finances of U.S. Farms: Family Farm Report ... - AgWeb

Appendix IV: Government Payments—Survey Versus Administrative DataThe Agricultural Resource Management Survey (ARMS) collects information—includinginformation about the receipt of farm program payments—directly from farmers. This allows analysts to show which types of farmsreceive various payments. For example, the body of this report shows thatcommodity-related payments flow largely to family farms with sales of atleast $100,000, while land-retirement programs go mostly to smaller familyfarms. Although collecting information directly from farmers does allowlinking Government payments to farm and farm operator characteristics,it may also introduce errors. For example, respondents may not be able toprovide complete or accurate information due to incomplete records, difficultiesin interpreting the questionnaire, or other reasons.Another source of information on Government payments is administrativedata based on the records maintained by the agencies that make thepayments. Administrative data capture all the payments made (barring errorsin recordkeeping), including payments made to nonoperator landlords whodo not farm but still receive Government payments associated with theirfarmland. The Economic Research Service (ERS) uses administrative datafrom other agencies—aggregated to the State level—to estimate Governmentpayments in its data series, “U.S. and State Farm Income” (also known asthe sector accounts). Nevertheless, despite the completeness of the administrativedata used in the sector accounts, Government payments from theaccounts cannot be linked to farm and farm operator characteristics.Total Payments From ARMS and the Sector AccountsARMS estimates of total Government payments are lower than the correspondingestimate from the sector accounts, by about $3.1 billion in 2007(app. table 3). One reason for the difference is that ARMS excludes farmprogram payments made to nonoperator landlords—approximately $1.7billion in 2007—while the sector accounts include them. ARMS contactsfarm operators exclusively (and not nonoperator landlords), while the sectoraccounts include all Government payments, even those made to nonoperatorlandlords. In addition, all survey data are subject to sampling and nonsamplingerrors. These errors may also contribute to a smaller ARMS estimate,although they theoretically could make the estimates smaller or larger.Defining the two types of errors is fairly straightforward (U.S. Departmentof Commerce, U.S. Census Bureau, 2010a, pp. 3-4; U.S. Department ofCommerce, U.S. Census Bureau, 1999, pp. E-2 to E-3). Sampling error is thedifference between an estimate based on a sample survey and the estimatethat would occur if the sample included the whole population. Nonsamplingerror is the difference between an estimate based on a sample survey thatincludes the whole population and the true population value (approximatedby the sector estimate, in this case). Sources of nonsampling error include:• Farm operators are unable (or unwilling) to provide the correctresponses.61Structure and Finances of U.S. Farms: Family Farm Report, 2010 Edition / EIB-66Economic Research Service/USDA