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Whether expressed in nominal or constant dollars, government payments in the 2007-09 period represent the lowest total volumes paid to producers since 1997. During this period, however, the importance of government payments as a percent of net cash farm income varied by ERS production region.
Payments by Type of Farm, 2009
Farm program payments vary by type of farm. In 2009, 820,000 farms (37 percent of all farms) received $9.5 billion in government payments. Among the farm types, government payments were paid to 3 out of 10 rural residence farms, 4 out of 10 intermediate farms, and 7 out of 10 commercial farms.
• Rural residence farms are small farms whose operators are either retired or reported a major occupation other than farming. Rural residence farms represent almost half of the farms receiving government payments and received 19 cents of the government payment dollar—12 cents from conservation programs, 5 cents from commodity programs, and 2 cents from other programs.
• Intermediate family farms are small family farms whose operators reported farming as their major occupation. Intermediate farms represent almost one-third of government payment farms and received 19 cents of the government payment dollar—9 cents from commodity programs, 5 cents from conservation programs, and 5 cents from other programs.
• Commercial family farms are large-scale farms with gross annual sales of $250,000 or more. Commercial farms represent one-fourth of all government-payment farms and received 62 cents of the government payment dollar—39 cents from commodity programs, 14 cents from other programs, and 9 cents from conservation programs.
Commodity Payments by Type of Farm, 2009
In 2009, commodity program payments, which are based on the farm's current or historical level of production, accounted for almost 50 percent of all government payments. Large economies of scale allowed commercial farms to produce 83 percent of the value of all program commodities. Rural residence farms produced only 5 percent of the total value of program commodities, while intermediate farms produced 12 percent. Therefore, it is not surprising that:
• Commercial farms received 74 percent of commodity program payments in 2009. They generated sales of $789,000 per farm by producing output on 1,820 acres, on average.
• Intermediate farms received 17 percent of commodity program payments in 2009. They generated sales of $78,000 per farm by producing output on 575 acres, on average.
• Rural residence farms received 9 percent of all commodity payments in 2009. They generated sales of $25,000 per farm by producing output on 243 acres, on average.