AGRICULTURAL ECONOMICS 



goods will be measured by the differential surplus 

 which the marginal farmer could produce upon 

 such land, by employing such capital-goods, plus 

 the further differentials arising from differences 

 in the efficiency of the farmers. 



Variation in productivity is, to be sure, the 

 primary occasion of differential rents, and if all 

 farmers possessed the same degree of qualitative 

 efficiency, the differential surplus would repre- 

 sent the differential rent, being the additional 

 amount which all farmers would as willingly pay 

 for the better land and the better grades of capital- 

 goods as consent to using the less productive 

 grades of these material agents of production. 

 But because of the differences in the efficiency of 

 farmers, the amount of differential surplus which 

 a given piece of land or a given horse or machine 

 will yield is not a definite amount, but varies with 

 the qualitative efficiency of the farmers ; and com- 

 petition determines what share of the surplus, 

 which a given farmer can produce, will actually 

 be paid as differential rent. The differential rent 

 of the better grades of the material instruments 

 of production will be greater than the differen- 

 tial surplus which the marginal farmer could pro- 

 duce by using them, but it will be less than the 

 surplus which the most efficient farmer can 

 produce. 



Fig. 7 is intended to illustrate the distribution 

 of the gross returns of the agricultural industry, 



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