Decline in agricultural sector’s net value added borne by equity owners

ERS forecasts net value added will decline by 6.1 percent and payments to stakeholders will increase by 0.9 percent ($0.5 billion) in 2016. Net value added represents the sum of economic returns to all stakeholders and equity owners. Stakeholders provide the hired labor, leased capital, and rental land used in agricultural production, but in most cases do not directly share risk in the short term. Stakeholders receive a fixed ¬payment in return for their services while equity owners share in the profits (net farm income). In general, the payments that stakeholders receive adjust more slowly over time than net returns to the equity owners of agricultural production. Find additional information and analysis in ERS’ Farm Sector Income and Finances topic page, released August 30, 2016.

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