While I have no problem with your averages and estimations, you leave the end of the article hanging with an implied conclusion--that the owner receives $4.9 million of easy revenue.  The large bulk of those payments require farming it.  Your analysis should continue on the cash flow and capital needed to actually farm it in those crops as you specify.  Do you have any idea the capital needed for equipment, the debt service for financing cash flow?  What type of money is required for rice, corn, cotton?  What type of return you can expect on that investment?  What weather and market risks do you face over a 10 year average?

I respect your right to gather public facts and present a case.  But I don't respect leaving implied conclusions that are far from telling the whole story.

Well, if you farmed 460 acres you surely wouldn't need a tractor that cost $150,000, or a brand new JD 9630 that would probably run you $240,000 or so. Thankfully, we do have some data on how many acres would be subsidized under a Grassley-Dorgan payment limits cap of $250,000 total with a 50% cotton-rice factor, which we have publicly advocated for. You can find the data on our website here. It's a lot more than 460 acres. We're not some naive fools who think that everyone in this country will have 50 acres, 10 chickens, 4 pigs and a cow.

I'm not sure what's so great about "commercial size" farming. Every year, the acreage definition of "commercial size" farming is a little bit bigger, which means every year fewer and fewer are on the land. Many argue that this is a natural and good process. I would disagree. Most importantly, I don't understand why we would have tax dollars subsidizing that consolidation.

As I mentioned in my previous comment, the real question here is why do we even have farm programs? From our perspective, which I strongly believe is supported by a majority of Americans, it is to support small and mid-sized family farms. Unlimited farm program checks directly contradict that purpose. Over and over, studies have shown that communities are healthier, richer, and just generally better off if they include and are surrounded by family-sized farms and ranches. And that's what farm programs should support.

And by the way, I don't want to hear any junk about farm programs providing us with a "affordable and abundant" food supply. We have never- never- had a problem producing food in this country. Farm programs were started during the Great Depression to support farmers who were going broke, not encourage food production. Even during the Depression, we had plenty of food- farmers just couldn't get a decent price for it. And there are plenty of studies that show completely eliminating farm programs- a terrible idea- would raise the price of food by a tiny amount. Heck, ethanol has doubled the price of corn, and that has raised the price of food by less than 1%.

So if someone wants to farm 20,000 acres, fine. Go right ahead and buy a $300,000 JD 9860 combine with a 16-row corn head, a $100,000 32 row JD planter, a $250,000 4930 sprayer with 120' booms. I don't like it, but this is a free country. But farm those acres-- and buy that machinery-- with your own money. And by the way, there are plenty of ways to farm that don't require that level of machinery costs anwyay.

These giant corporate farms are always talking about how "efficient" they are, and how the "inefficient" little guy should go out of business. Prove it. Finance that equipment on the basis of how good a farmer you are, not farm programs. Because farm programs, just like all government programs, draw on limited resources and those resources should be used to support the kind of farming and rural communities we want in this country. Senator Paul Wellstone always said, "If you want to farm six counties, fine. But don't expect the government to pay you to do it."

 So by your defination a family farm can't be big? All of the farms in several southern states on EWG's top 10 list in each state are family farms. You dan't want farm subsidies on large farms? What do you think about ethenol tax breaks and mandating X number of gallons of use is? You think 20,000 acre farms in LA is big? What do you think $4 corn is going to do? Decrease farm size? In my little corner of the world several farms have changed hands and no small family farmer could bid with the big boys.

There will allways be farm subsidies and if you keep large farms out ,the subsidies will not do what they are supposed to do. Whether it's to limit supply, or to lower dependence on foriegn oil (which I think is wrong but a whole different thread). The large farms (whatever your difination) will always grow the most of what ever your talking about.

By the way you need a "check spelling" tab.

I should have clarified earlier. The term "family farm" is a vague concept, but our basic, working definition is as follows. A family farm is one in which a single family owns a substantial portion of the assets, exerts significant decision-making authority, and provides a substantial amount of the labor.

This definition, of course, can be problematic. Is a farm with 1,000 acres a family farm if the family owns 100 acres and rents 900? I would say so, but some wouldn't. So there's no hard and fast rule, but I think most people know a family farm when they see one.

Interestingly, I think one of the greatest threats to the family farm is the decreasing amount of decision-making by the farmer. This threatens the traditional independence and autonomy of the farmer, which I believe is a key aspect of the family farm values I support. For instance, in many livestock operations these days (especially poultry), the meatpacker with whom the producer has a contract dictates the practices the producer must follow in order to sell their animals. In poultry, a company like Tyson will tell the grower how to build the confinement buildings, sell them the chicks, tell them what to feed the chicks, and dictate the price received when the grower delivers fat chickens to Tyson's packing plant. As many have said, the only time the grower actually owns the chicks is if they die. All of the risk has been put on the grower, with little corresponding profit. That is a real threat to independent family farms- in that arrangement they are little more than wage-based employees, and we're seeing that model spread throughout many sectors of agriculture. Farmers might as well be employees. At least they might be eligible for benefits then.

$4 corn has led to higher land values and cash rents, though I would argue that is on top of an already-inflated land market due to unlimited farm program checks. The arguments about payment limits are many, but a basic, bottom line one I often make is that even if payment limits are irrelevant to farm consolidation (which I would strongly dispute), the simple fact is that we are wasting taxpayer dollars that could be used for programs much more beneficial to all of rural America, such as rural economic development programs.

You're absolutely right that the ethanol tax credit and renewable fuels standards encourage commodity production and indirectly prop up farm prices. Bruce Babcock, and Iowa State ag economist, has argued that those measures are now the primary method by which the government supports the farm sector, and that farm program spending and structure should change fairly dramatically to reflect that. I'm not entirely sure about all of that, but I do know that we strongly feel that the ethanol tax credit should ONLY go to ethanol purchased from farmer-owned co-ops according to an environmental standard. It's the same principle as payment limits- government policies should be targeted to benefit rural communities and true family farms, period. Why we need to give ADM 50 cents for every gallon of ethanol they produce is beyond me. The renewable fuels standard is another matter, one that is more difficult to target properly, and most economists hate it.

Personally, I'm not so sure we will always have farm subsidies. Every year there are fewer farmers and rural Americans, and that means less representation in Congress. I think that some day, the urban majority will come and take the money from farm programs for things like social security, etc. And when they do, they will justify it by pointing out that enormous farms are receiving millions of dollars. They will say that farm programs are not benefiting rural America and true family farmers, which is how they are marketed by the large farm groups. In fact, I would argue that the only way to preserve the political viability of farm programs is to reform them, and target their benefits to the type of farming all Americans, rural and urban, support. That would be true family farming.

Farm programs no longer exist to limit supply. The supply management system was slowly dismantled from about 1970 onward and completely disappeared with the 1996 farm bill. The argument was that enforcing payment limits would encourage large farmers to opt out of the supply management system, thus increasing production and making supply management efforts irrelevant. Today, though, there is almost nothing in the way of set-asides, etc. You can produce as much as you want and still get paid by the government.

Under our proposal, a rice/soybean farm would be subsidized to about 1500 acres with current prices. A corn and soybean farm would be about 2,600 acres. That's for a married farm couple. If they have any children involved, that number goes up pretty fast. Those are not small farms.

As we've said before, we can debate what the limit on farm program payments should be, but we will always insist on the principle that there should be a limit. Amusingly enough, Congress knows that farmers and all Americans want a limit, so they institute one (currently $360,000) and then put in all sorts of loopholes so the supposed limit is meaningless. That way they can tell everyone there is a limit, yet continue to send out multi-million dollar subsidy checks. And the number one individual receiving farm program checks over the past three years is not a farmer- he's a real estate developer living in Tampa, Florida. He received $3.2 million in 3 years. I don't know how anyone can justify that as a wise use of taxpayer dollars.

Oh yes they do. Up until this year it has been verying hard to make a profit with all the payments. If you leave anything on the table it's slow death for a family cotton or rice farm.

You are not taking into account the costs of cotton gins and warehouses or elevators/storage. That is the fallacy of freedom to farm. In the Mid-South the elevators are not able to handle the mountians of corn trying to come to market. The investment to upgrade  will take out the profits. We  have gone from  cotton is king to corn is king and no-one is willing to invest in the infracture because next year it might be something else.

If you want your investment guaranteed, buy savings bonds.

 If you invest in grain storage, or bred sows, or farmland on the edge of a growing town, you get no guarantees.

Who guarantees the investment at the local factory or the local restaurant?  

 Are you longing for a planned economy? 

I have been trying to understand this subject for a while, there is so much information out there, but your post helped me understand the concept.

So thank you!