ABSTRACT
This chapter explores how the confluence of federal agricultural policies and the changing structure of the farm have affected farm household income and labor allocation. In 1930, it accounted for 7.7% of United States (US) gross domestic product and employed over 20 million people across 6.3 million farms, or roughly one-fifth of the working US population. Farm income is highly variable, and this variability can affect household welfare, as well as production choices and environmental quality. The adoption of productivity-enhancing technology by US farms has also contributed to a rise in the share of hired labor used on the farm relative to self-employed/family labor. By managing the downside risk of agriculture, the Agricultural Act of 2014 aims to protect producers while reducing the historical distortionary policies in commodity markets. Land conservation and acreage idling played a large role in supply control mechanisms of US agricultural policy until the 1980s.
