Alternative 4 — Partly Owned and Partly Hired 



Assuming no value for labor freed through the substitution of custom 

 for self-performed jobs, it would be profitable to hire only the seeding of 

 grass done on a custom basis. This would result in savings of only $14 and 

 machinery investment would be reduced by only $175, or 2 percent. The 

 workload for the machines on farm C is large enough so that hiring only 

 the grass seeded would be profitable even if freed labor is valued at $1.00 

 an hour. The total investment in machinery would be reduced by only 2 

 percent and total machinery costs by $20. ^^ 



Alternative 5 — Partly Owned, Partly Custom Hired, and Custom Work Off the Form 



The profitable hiring of only one cropping job, with either wage assump- 

 tion, under Alternative 4 limits the alternatives that could be developed for 

 doing custom work ofE the farm. Custom-hiring grass seeding done frees only 

 four hours of permanent labor. Assuming that custom plowing could be done 

 with the freed labor, the complete adjustment involving both the hiring of 

 grass seeding done and doing custom plowing would increase net farm in- 

 come by $31 and decrease total machinery costs by $17. ^^ 



Summary of Alternative Ownership Patterns 



Table 26 summarizes the effect of the various ownership patterns on 

 farm income and costs when labor freed because custom hiring is substituted 

 for owned equipment cannot be productively employed on the payroll. Al- 



Table 26. — Comparison of investment and Costs and Returns for Alternative Patterns of 

 Ownership of Machinery, Assuming Farm Labor Is Not a Cost, Farm C, 1949 



*A11 equipment valued at full 1949 purchase price. 



flncludes costs of hiring custom work. 



jSee Table 25 for a list of operations. 



§The same group of operations were compared as in Table 25. 



1 1 See text, page 36, for a description of operations. 



19 The single opportunity for hiring custom work in combination with self-owned 

 equipment frees no hired seasonal labor. Therefore, no effect on costs is associated 

 with releasing or continuing to employ hired labor as on farms A and B. 



36 



