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 USDA's
Agricultural Resource Management Survey (ARMS) data provide an unmatched
tool for analyzing policies designed to improve farm well-being.
ARMS data report on both the condition of farm businesses and the
farm households that operate them. ERS's new report on farm income,
wealth, and well-being is the culmination of a concerted program
of data collection, analysis, and publications geared toward understanding
what farms and farmers earn, and how their welfare changes. The
resources highlighted here are a guide to recent work in this important
ERS research area.
| Publications |
 Income,
Wealth, and the Economic Well-Being of Farm Households—Using
ARMS data, this analysis hinges on a new economic well-being
concept that captures farm household wealth and expenditures
in addition to more conventional income measures. The report
also addresses pertinent policy issues such as whether farm
households are inherently disadvantaged and how their incomes,
wealth, and household expenditures compare with nonfarm households.
While the economic well-being of a vast majority of farm households
appears favorable in comparison to nonfarm households, between
6 and 21 percent of farm households exhibit difficult circumstances.
Many of these households hold wealth in their businesses that
could be used to sustain consumption. However, lower income,
lower wealth households, many of whom appear to be beginning
farmers, have relatively low levels of consumption, low incomes,
and few resources to offset any unexpected income shortfall
either from farming or elsewhere. |
| A Safety Net for Farm Households—Discussions
in the public arena have raised fundamental questions about
the ultimate goals of farm policy and the need for establishing
a safety net for farm households. ARMS data on farm characteristics
and the ERS farm typology in this report are used to examine
four scenarios for government assistance to agriculture based
on the concept of ensuring some minimum standard of living. |
| Characteristics and Production
Costs—This series of reports examines how production
costs vary among producers of different commodities. The reports
include details derived directly from ARMS data on production
practices and input use levels (i.e., the technology set), as
well as farm operator and structural characteristics that underlie
the most recent cost and return estimates. The commodity-specific
surveys, conducted as part of ARMS every 5-8 years on a rotating
basis for each commodity, support annual commodity costs and
returns estimates, which are updated between surveys to reflect
changes in input costs and commodity prices and production. |
| Structural and Financial
Characteristics of U.S. Farms: 2001 Family Farm Report—Family
farms range from very small retirement and residential farms
to establishments with sales in the millions of dollars. The
farm typology developed by ERS based on ARMS data categorizes
farms into groups based primarily on occupation of the operator
and sales class of the farm. The groups differ in their importance
to the farm sector, product specialization, program participation,
dependence on farm income, and other characteristics. See also America's Diverse Family Farms: Assorted Sizes, Types, and Situations. |
| Briefing Rooms |
Farm Income and Costs
The ERS farm income and costs program measures, forecasts, and
explains indicators of economic performance for the U.S. farm
sector and major crop and livestock farm groups. This briefing
room presents estimates, forecasts, and analysis of farm income
and costs derived by ERS analysts from the ARMS data and other
sources. |
Farm Household Economics and Well-Being
This briefing room focuses on indicators of the economic well-being of the households of the principal operators of family farms. In addition to income and wealth, the briefing room describes indicators of poverty status, an income-wealth indicator, health insurance coverage, household living expenses, and farm injuries. |
Farm Structure
Farm structure underlies the efficiency and competitiveness
of the farm sector, the well-being of farm households, the design
of public policies, and the nature of rural areas. Farm structure
covers a variety of topics, including the number and size of
farms, concentration of production, tenure, farm organization,
business arrangements (including contractual agreements), and
the characteristics of farmers and their households. |
Agricultural Resource Management
Survey (ARMS)
Systematic collection of farm business and household information
is the key to useful policy analysis. This briefing room presents
information on the use and importance of USDA's ARMS data, how
ARMS is conducted, its content and coverage, and detailed documentation
of the survey instruments. |
| Articles |
| Higher
Cropland Values from Farm Program Payments: Who Gains?—Government
commodity program payments are estimated to have added nearly
$62 billion to U.S. farmland values, as farmland value depends
largely on expected future earnings, including program payments.
For many farm operators who own land, farmland value increases
are favorable. But for operators who pay more to buy land, appreciated
values add to the fixed cost of production, largely related
to higher financing costs and/or real estate taxes. Operators
who lease farmland may pay higher rents that reflect their receipt
of some of the government payments. See also Government
Payments to Farmers Contribute to Rising Land Values. |
| Using
Farm Sector Income as a Policy Benchmark—Measures of
farm sector income are valuable indicators of how well U.S.
agriculture is performing, but may not fully capture the financial
situations of farmers and farm families. Intended policy outcomes
and the actual results often diverge because aggregate measures
do not reveal the wide variations in income and circumstances
among various farm groups, do not reflect off-farm income and
wealth, do not reveal farmers' debt problems, and give no indication
of how many farms fail financially. |
| Impact
of Government Payments to Farms Varies by Level of Profitability
& Household Income—High levels of government payments
to the U.S. farm sector have forestalled a significant drop
in national farm income in recent years. While payments boost
both profitability and household income, the gains in profitability
are disproportionately greater for farms with the highest and
lowest rates of return, and the income gains are greater for
those at the highest and lowest ends of the household income
distribution. |
| A
Fair Income for Farmers?—Political debate over agricultural
subsidies and the notion of a "fair" income from farming
is likely to continue as farmers face persistent low field crop
prices and the prospect of reduced farm income. ERS analyzed
the financial performance of farms, delineating them by enterprise
(commodity) type. The diversity in farm characteristics and
in financial performance indicated by the analysis illustrates
the difficulties faced by policymakers in determining the distribution
and level of government income support. |
| A
Safety Net for Farm Households?—ERS has analyzed
the concept of government assistance to agriculture based on
ensuring some minimum standard of living for farm households.
Guided by examples from existing Federal programs for moderate-income
households, ERS constructed several safety-net scenarios for
assisting farm households, retaining current government commodity
programs. Results indicate, for example, that households of
almost all farms classified as limited-resource in the ERS farm
typology would receive safety-net payments, compared with less
than one-fifth who received direct government payments in 1997. |
| Journals |
| The Dynamics of Wealth Concentration Among Farm Operator
Households—Published in Agricultural and Resource Economics
Review, Vol. 31, No. 1, April 2002. |
| A Temporal Comparison of Sources of Variability in Farm
Household Income—Published in Agricultural Finance Review,
Vol. 61, No. 2, Fall 2001. |
| Factors Contributing to Earnings Success of Cash Grain
Farms—Published in Agriculture and Applied Economics, Vol. 31, No. 3, December 1999. |
| Factors Affecting the Profitability of Limited-Resource
and Other Small Farms—Published in Agricultural Finance
Review, Vol. 59, 1999. |
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