Tax Fact #26: $9 Billion to a Nation of Part-Time Farmers?

According to recent Department of Agriculture statistics, America has become a nation of middle-class, part-time farmers. Yet some lawmakers are suggesting that because of the recent dip in crop prices, farmers should be given as much as $9 billion in direct crop support payments and subsidies for disaster programs such as low-cost crop insurance. Before throwing $9 billion to a handful of part-time farmers, lawmakers should consider the following information reported in the USDA’s Agriculture Fact Book for 1998:

In 1996 (the latest figures available), average household income for farm operator households was $50,360 – equal to the median family income – with about 84 percent of this income coming from off-farm sources.

Among households with the largest farms (sales of at least $500,000), off-farm income averaged $34,950 per household.

In 1996, there were about 544,000 farm households with income above $50,000. These households had an average income of about $114,000, 72 percent of which came from off-farm sources.

The average value per acre of farm land increased from $798 in 1994 to $974 in 1998, a 22 percent jump in value.

Total U.S. farm cash receipts grew from $177.6 billion in 1993 to $208.6 billion in 1997, a 17.5 percent increase.

$9 Billion Can Buy a Lot of Farms

In 1998, the value of a typical acre of farm property (including land and buildings) was $974. So, for every $1 billion in agriculture “relief” funding, Uncle Sam could buy 1 million acres of farm property. With $9 billion, Washington could buy more than 9.2 million acres of farm land, enough to buy every acre of farm land in New York and New Jersey combined.

In 1998, the typical farm was worth $423,690, including land and buildings. So, for $1 billion Uncle Sam could buy 2,360 farms, and with $9 billion the government could buy more than 21,240 farms – equal to buying one-third of all the farms in Kansas.

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