Economic and Marketing Information
FOR INDIANA  FARMERS
Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana   
June 30, 1970
Government Farm Program Payments
by Jerry A. Sharpies*
'F GROWING INTEREST is
the question of placing limits on
Government payments to farmers.
Hearings on proposed farm legislation for the 1970's are now being
conducted in Congress. Payment
limits is one of the key issues. If
payment limits are imposed the
questions are: (1) what farm programs should be limited, and (2)
how large should the limits be?
How would payment limits affect Hoosier farmers? What would
be the impact in other parts of the
country? Before addressing these
questions, let's look at some facts
about farm programs and Government payments to farmers.
Government farm program payments have steadily increased
during the 1960's, from a low of
$0.7 billion in 1960 to $3.5 billion
in 1968. The increase continued
in 1969. Today Government payments are equivalent to one-
fourth the nation's total net farm
income.
Hoosier farmers' share of farm
income coming from Government
payments is near the national
average. Government payments
are even a more important source
of farm income in the Great
Plains, where wheat is an important crop. For example, in North
Dakota payments are equivalent
to about half of the total net farm
income. Government payments
are a much smaller part of the
farmer's income in states where
feed grains, wheat or cotton are
not very important crops.
* Agricultural Economist, Farm Production Economics Division, Economic
Research Service, U.S. Department of
Agriculture, stationed at Purdue University.
Farmers receive payments from
many farm programs. Most of the
$3.5 billion paid to farmers in 1968
were distributed through the feed
grain program ($1.37 billion),
wheat program ($0.75 billion),
and cotton program ($0.79 billion) . But farmers also receive
Government payments from ten
other programs—all administered
by the Agricultural Stabilization
and Conservation Service of the
U.S. Department of Agriculture.
These programs are listed in Table
1.
In Indiana farm program payments totaled $120 million in 1968.
Feed grain (mostly corn, but a little grain sorghum) payments
made up three fourths of the farm
payments. Wheat payments accounted for 13 per cent of the
total, and the remaining payments
came mainly from the several
conservation programs.
The $3.5 billion in Government
payments were distributed to 2.5
Table 1. Government payments
by programs, United States
and Indiana, 1968.
Program
U
nired States
Indiana
—million
dollars—
Feed grain
1,336
94
Cotton
787
Wheat
747
16
Other**
562
10
TOTAL
3,462
120
* Indiana farmers received $4,000 in cotton
payments for cotton raised in other states.
•• Includes the following programs: ACP, Great
Plains Conservation, Conservation Reserve,
Cropland Adjustment, Sugar, Wool, Emergency Conservation, Cropland Conversion,
Appalachia,  and Milk   Indemnity.
SOURCE:    U.S.  Department  of  Agriculture.
Figure 1. Total net farm income
and Government payments,
United States.
SOURCE:   U.S. Department of Agriculture.
million payees in the U.S. A
payee is anyone who receives a
payment; an operator, landlord,
tenant, corporation, etc. In many
cases there are several payees per
farm.
The size of the individual payments to U.S. producers range
from several dollars to over $2
million. Most of the payments are
small but most of the funds go to
relatively few payees. For example, 68 per cent of the payees received less than $1,000 each from
all programs, but they received
only 18 per cent of the total payments. Most of the large payments went to cotton producers.
In the U.S., 318 payees received
more than $100,000 each, and 70
per cent of their total payment
came from the cotton program.
Figure 2 shows the distribution of
payments from each of the three
major commodity programs. Funds
from the feed grain program are
the most evenly distributed among
payees. Cotton program funds are
more concentrated among payees
on large cotton farms.