More on Government Payments

Earlier, I discussed the relationship between government payments and farm size. Here, I want to talk a little more about some of the data from the 2007 Census of Agriculture. First, one of the most common critiques is that most of the government payments go to the largest farmers. The figure below illustrates this point.


Here, we clearly see that the average payments per farm are increasing with farm size. In fact, a total of $19.4 million went to farms with less than $1,000 in sales whereas $1.7 billion went to farms with over $1 million in sales. But, alas, this does not tell the whole story. The figure below takes the total sales of farms in each class size divided by the total government payments. Think of this like the sales generated per dollar of taxpayer money invested.


What this diagram shows is that while larger farms do receive a larger average government payment, they also produce many times larger value of product per dollar of taxpayer expenditure. These data would seem to suggest that payments are being more "efficiently" used by larger farms to generate more output per dollar spent. This, of course, is just one way of looking at the issue, but it is not one you are likely to see in the mainstream media.