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

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• Farm operators forget minor or irregular payments.• Farm operators (or interviewers) experience difficulties in interpretingthe question.• Errors occur in data processing, such as recording or coding the dataincorrectly or losing questionnaires.• Errors occur in imputing values for missing data.• Some farm operators that should have been in the sample are missed(coverage error).Appendix table 3Government payments by program from ARMS and the sector accounts, 2007ItemARMS Sector accounts 1 Capture rate 2Amount Distribution Amount DistributionMil. $ Percent Mil. $ PercentNot adjusted for nonoperator landlordsTotal Government payments 8,751 100.0 11,903 100.0 73.5Commodity-related payments 6,516 74.5 8,831 74.2 73.8Direct and counter-cyclical payments 5,242 59.9 6,185 52.0 84.8Direct 4,160 47.5 5,060 42.5 82.2Counter-cyclical 1,082 12.4 1,125 9.5 96.2Marketing loan benefits 3 145 1.7 1,115 9.4 13.0Other commodity-related payments 4 1,129 12.9 1,531 12.9 73.7Conservation payments 2,234 25.5 3,072 25.8 72.7Land-retirement 5 1,757 20.1 1,929 16.2 91.1Working-land 6 477 5.5 620 5.2 76.9Programs not listed in ARMS questionnaire 7 — — 523 4.4 —Adjusted for nonoperator landlords 8Total Government payments 8,751 100.0 10,156 85.3 86.21From the U.S. and State Farm Income Data series—the farm sector accounts—prepared by the Economic Research Service.2The ratio of the ARMS estimate to the sector estimate, expressed as a percentage.3Loan deficiency payments, marketing loan gains, and net value of commodity certificates.4Disaster and market loss payments, peanut quota compensation, milk income loss contract payments, other Federal program payments,and State and local program payments.5Conservation Reserve Program, Conservation Reserve Enhancement Program, Wetlands Reserve Program, and FarmableWetlands Reserve Program.6Environmental Quality Incentives Program and Conservation Security Program.7Agricultural Conservation Program, Agricultural Management Assistance, Forestry Conservation Reserve, Grasslands ReserveProgram, Soil/Water Conservation Assistance, Agricultural Management Assistance Program, Farmland Protection Program,Forestry Incentives Program, Wildlife Habitat Incentive Program, etc.8Government payments to landlords ($1.7 billion) was subtracted from the sector estimate, to be consistent with ARMS.Sources: USDA, National Agricultural Statistics Service and Economic Research Service, 2007 Agricultural Resource ManagementSurvey (ARMS), Phase III. USDA, Economic Research Service, U.S. and State Farm Income Data (the farm sector accounts) atwww.ers.usda.gov/data/farmincome/finfidmu.htm.62Structure and Finances of U.S. Farms: Family Farm Report, 2010 Edition / EIB-66Economic Research Service/USDA
Capture RatesARMS captured 74 percent of the sector estimate of total Governmentpayments in 2007. The sector estimate, however, is made up of two parts—the farm share of $10.2 billion and the nonoperator landlord share of $1.7billion, mentioned earlier. If the ARMS estimate is compared only with thefarm share of the sector estimate, the ARMS capture rate increases to 86percent (see the bottom of the table).The U.S. Census Bureau calculated a capture rate of the same magnitude asthe ARMS rate when comparing income from its Current Population Survey(CPS) with an estimate based on administrative and other secondary data(U.S. Department of Commerce, U.S. Census Bureau, 2010b). Aggregateincome from the CPS in recent years typically has captured about 89 percentof the aggregate personal income estimated by the Bureau of EconomicAnalysis. Interestingly, the 2007 Census of Agriculture has a 68-percentunadjusted capture rate for Government payments, 6 percentage points lessthan the 2007 ARMS rate in the table. Total Government payments in thecensus are $8 billion, or 9 percent less than the corresponding estimate fromARMS.Program CategoriesNonoperator landlords’ Government payments cannot be allocated to individualprograms in the sector accounts. This means appendix table 3 understatesthe capture rates for different types of programs, since the ARMSestimates in the table—which exclude payments to nonoperator landlords—must be divided by sector estimates that do include those landlord payments.Nevertheless, examining the capture rate for each category gives an idea ofthe reliability of the ARMS estimate for different types of payments. MostARMS estimates are reasonably close to the sector estimates, roughly within70 to 90 percent of the corresponding sector estimates.The sole exception is marketing loan benefits: ARMS captures only 13percent of the sector estimate. In 2007, nearly all of those payments wentto cotton producers, who often sold their cotton through cooperatives. Thecooperatives collected marketing loan benefits as they sold the cotton andthen passed the benefits on to their members. It may have been difficult forrespondents to separate marketing loan gains from other receipts from theircooperatives. If this difficulty did indeed lower the estimate of marketingloan gains, a nonsampling error occurred.Which Source To Use?Both ARMS and the sector accounts provide useful information aboutGovernment payments. The choice of the data source to use depends onthe questions under consideration. The sector accounts are preferable foraggregate totals, since ARMS does not survey all recipients while the sectoraccounts tally up all the payments made, program by program, even forsmall programs. Thus, the sector data are useful in understanding the sizeand composition of payments made by the Government to farmers. Thesedata also are useful for following long-term trends in Government payments63Structure and Finances of U.S. Farms: Family Farm Report, 2010 Edition / EIB-66Economic Research Service/USDA
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United StatesDepartment ofAgricultu
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United StatesDepartmentof Agricultu
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References. . . . . . . . . . . . .
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Distribution of farms, total produc
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IntroductionThe Family Farm Report,
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As in previous issues, the Agricult
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came from technological change, suc
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percent of the farms in both groups
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“point system” assigns values f
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Page 45 and 46: ContractingContracts can potentiall
Page 47 and 48: Types of ContractsA contract is a l
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Page 55 and 56: Farming in Metropolitan AreasFarmin
Page 57 and 58: Figure 15Mean operator household in
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Page 68 and 69: iefing room. Both sets of estimates
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