FARM INCOMES. 



EAKL D. DAVIS. 



The primary purpose of this paper is to formulate some general conclu- 

 sions regarding the average amount of income received by farmers in the 

 United States, and to segregate, as far as practicable, the various elements 

 which compose this income. 



The difficulty of the task at hand is readily perceived. When there is sep- 

 aration in the ownership or control of the various productive factors, it is 

 comparatively easy to evaluate the services or contributions of each one of 

 these factors. But, when all four factors of production, land, labor, capital, 

 and entrepreneurship, are furnished very largely by one and the same person, 

 it is difficult to differentiate the component parts of this single income. This 

 is very generally the case with the agricultural enterprise. As a rule, the 

 American farmer furnishes 7ns land, his capital, and his labor services 

 (including that of his family), and he alone is responsible for the enterprise. 

 Assuming that all of the factors thus represented make a contribution, he 

 ought to receive in income rent on his own land, interest on his own capital, 

 icages for his own lahoi; and profits for assuming the risks of the enterprise. 



But, before we attempt to apportion the farmer's income into its compo- 

 nent parts, we have first to determine what that income is. For this purpose, 

 let us examine the data which the office of Farm Management has recently 

 compiled. It has formulated a summary of the average farmer's earnings for 

 1909 as follows : The average total farm income including value of crops 

 ($511), value of live stock products ($177), value of animals sold and 

 slaughtered ($288), value of house rent ($125), value of food provided by 

 farm ($100), and value of fuel provided by farm ($35), amounted to $1,236. 

 On the other hand, the average total farm expenditure including outlay foi 

 labor, seed, threshing, animal purchases, taxes, miscellaneous expenses ($432), 

 and maintenance charges ($80) amounted to $512. Thus, the average gross 

 earnings of the farmer and farm family amounted to $1,23G minus $512, or 

 $724. But, deducting interest at 5% on the value of the farm property, or 

 $322, the net earnings of the farmer and farm family averaged $402. 



Now as a matter of fact, these data set forth the truth more adequately 

 than one might think. Recently a survey was made of 2,090 farms located in 

 Indiana, Illinois, Iowa, Michigan, Pennsylvania, and New York under the 

 auspices of the Office of Farm Management, and the average income per farm 

 was found to be $439. So far as the average income per farm is concerned, 



21st Mich. Acad. Sci. Rept., 1919. 



