Table 13 shows similar data relative to accumulating 30 percent of real 

 estate and 50 percent of equipment and livestock value (as commonly re- 

 quired by New Hampshire banks). Both the number of farm sizes and the 

 number of price and time conditions under which tenant operators have 

 the necessary saving potential are increased as compared to the situation 

 where 50 percent of the value of total capital is required, 



3. Accumulation of 30-50 Percent Equity in 10 Years 



An equity of 30 percent of real estate and 50 percent of livestock and 

 machinery in 10 years is equalled only by the saving of a tenant operator 

 of the 3-man, 72-cow farm with $5.50 milk, if depreciables are new. If 

 depreciables are at 50 percent of new price, the 2-man, 40- and 56-cow 

 farms and the 3-man, 56- and 72-cow farms can qualify with ,15.50 milk. 

 If the price of milk is $5.00, the only farm to qualify in 10 years is the 

 3-man, 72-cow unit and that only with depreciables at one-half of new value. 



4. Accumulation of 30-50 Percent Equity in 20 Years 



With $5.50 milk the 1-man, 40-cow, 2-man, 40- and 56-cow, and 3-man, 

 40-, 56-, and 72-cow farms can qualify in 20 years with depreciables at 

 either 50 or 100 percent of new value. If milk is at $5.00 and depreciables 

 at new value, only the 2-man, 56-cow, and 3-man, 56- and 72-cow farms 

 have the necessary saving potential. With the same milk prices and depreci- 

 ables at one-half new value, the 1-man, 40-cow, 2-man, 40- and 56-cow, and 

 3-man, 56- and 72-cow farms all have the needed saving potential. 



5. Summary of Tenant Operator's Accumulation Potentials 



The hired man does not have an accumulation potential for any size farm 

 in 10 or 20 years under our assumed conditions. The picture for tenant 

 operators varies greatly with the various combinations of equity require- 

 ments, milk prices, and age of depreciables. At one extreme, only the tenant 

 operator of the 3-man, 72-cow farm with $5.50 milk could save a 50 percent 

 equity with depreciables at one-half new price in 10 years. At another 

 extreme, tenant operators of the 1-man, 40-cow, 2-man, 40- and 56-cow, and 

 3-man, 56- and 72-cow farms had saving potentials to accumulate 30 percent 

 of real estate and 50 percent of livestock and equipment values in 20 years 

 with $5.00 milk, if depreciables were 50 percent of new value. It may, of 

 course, be questioned whether young men would choose to become tenant 

 operators in order to become farm owners if this involves 20 years of 

 very rigorous saving plus price and tenure uncertainty. Moreover, in prac- 

 tice, renting has not been a common form of tenure in New England; 

 hence it has offered relatively few opportunities as a way of farm oper- 

 ation and equity accumulation. 



Conclusions for Individual and Institutional Action 



In normal price and efficiency situations, farmers can acquire full owner- 

 ship out of earnings only if they operate the larger size farms. They can 

 earn the necessary equity for conventional credit (to get started as mort- 

 gaged owners) only if they have the use of the larger size farms. This 

 requires either: (1) an expansion of suitable renting arrangements, or (2) 

 an expansion of practically 100 percent credit. 



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