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Boom for Whom?
Do high crop prices benefit family farmers?

Download “Still Waiting for the Farm Boom: Family Farmers Worse Off Despite High Crop Prices,” by Timothy A. Wise, GDAE Policy Brief 11-01, March 2011.

Since late 2006, crop prices have risen dramatically, reversing a decades-long trend that saw persistent declines in agricultural commodities prices. U.S. Department of Agriculture officials talk about boom times for U.S. farmers, citing their most recent figures on the economic performance of the farm sector. Recent reports point to records in net farm income.

But are small-to-mid-scale family farmers really benefiting from the boom? No, according to the latest of three studies by Timothy A. Wise, who has looked behind the glowing headlines on the farm sector as a whole to examine how family farmers have fared in this high-price environment. Using readily available USDA data that breaks down the widely diverse range of working and non-working farms included in aggregate statistics, Wise shows in “Still Waiting for the Farm Boom: Family Farmers Worse Off Despite High Crop Prices,” that small-to-mid-scale family farmers – those with gross sales between $100,000 and $250,000 per year farming an average of about 1,100 acres – have seen a decline in net farm income with high prices. Expenses have risen to gobble up higher sales revenues, and government payments have declined because some are triggered by lower prices. With the recession, off-farm income has declined dramatically, leaving family farm households worse off than they were earlier when crop prices were low.

He finds that for 2009 (the most recent year of data available), these family farmers:

  • Had household incomes 28% below 2007 levels and 21% lower than the average for 2000-6, when crop prices were considerably lower.
  • Average earnings from farming were just $19,274, including government payments.
  • Off-farm income continued to sustain the family, providing on average about $35,000, but this represented a decline of 24% from 2007.
  • Net cash farm income was down 18% from the lower price years 2000-6. Farm sales were up 10%, but expenses increased 8%. An $8,000 decline in government payments put these family farm businesses below their net incomes from the earlier period.
  • The largest farms, those with sales over $500,000 per year, accounted for 73% of the net cash income for the U.S. farm sector as a whole. That figure rises to 88% if one includes the relatively small group of “non-family” farms, those that are incorporated or operate as other types of business. These are the clear winners from high crop prices.
As in his earlier studies, Wise recommends that policy-makers and the media stop relying on the USDA’s aggregate farm statistics, which provide a misleading picture of the farm economy in general and family farmers in particular.

Download “Still Waiting for the Farm Boom: Family Farmers Worse Off Despite High Crop Prices,” by Timothy A. Wise, GDAE Policy Brief 11-01, March 2011.

Read: “Boom for Whom? Family Farmers Saw Lower On-Farm Income Despite High Prices,” by Timothy A. Wise and Alicia Harvie, GDAE Policy Brief 09-02, February 2009.

Read: "Understanding the Farm Problem: Six Common Errors in Presenting Farm Statistics," by Timothy A. Wise, GDAE Working Paper No. 05-02, March 2005.

Timothy Wise interviewed on the Family Farm Boom.

Timothy A Wise was interviewed by The Real News Network on this policy brief, "Still Waiting for the Farm Boom: Family Farmers Worse off Despite High Crop Prices," part of Wise's continuing work in GDAE's Beyond Agricultural Subsidies program.


Read more on GDAE’s work on U.S. agricultural policy: Beyond Agricultural Subsidies

Read more on GDAE’s Globalization and Sustainable Development Program.

The Global Development and Environment Institute’s Globalization and Sustainable Development Program examines the economic, social and environmental impacts of economic integration in developing countries, with a particular emphasis on the WTO and NAFTA's lessons for trade and development policy. The goal of the program is to identify policies and international agreements that foster sustainable development.

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