182 AGRICULTURAL ECONOMICS 



market. When land of an inferior quality is taken into cultivation, 

 the exchangeable value of raw produce will rise, because more labor 

 is required to produce it. 



52. EXTENSIVE AND INTENSIVE MARGINS OF CULTIVATION 1 



BY HENRY ROGERS SEAGER 



To give precision to the statement of the law of diminishing 

 returns it is customary to distinguish between the "extensive" and 

 the "intensive" margins of cultivation. If, for example, the demand 

 for corn increases so as to induce the production of a larger crop, the 

 additional supply may come from either or both of two sources. 

 Corn-growers in the settled portions of the country may make their 

 farming more intensive; that is, apply more labor and capital to the 

 cultivation of each acre and in this way add to their crops. Others 

 may be induced to take up new land and prepare it hastily for extensive 

 farming. If both results follow the prospect for a somewhat higher 

 price for corn, as they would if farmers were always alert to their own 

 interests and able to adapt their methods promptly to changing mar- 

 ket conditions, there will be two situations in which the expenses of 

 producing corn are just covered by the price. The corn grown on 

 the poorest land hastily plowed and planted, or on the extensive 

 margin of cultivation, will barely repay the expenses of production. 

 So also will the additional corn raised by the application of additional 

 labor and capital at the intensive margin of cultivation. The producer 

 at either margin may in such a case be properly described as the 

 marginal producer, whose expenses of production are just covered by 

 the price of the product. The fact that his additional corn just about 

 pays for itself will not, of course, prevent the farmer at the intensive 

 margin from realizing a rent from that corn which he continues to 

 produce at smaller proportionate expense. 



53. THE LAW OF DIMINISHING RETURNS ELABORATED AND 



QUALIFIED 1 



BY JOHN STUART MILL 



Land differs from the other elements of production, labor, and 

 capital in not bc-ing susceptible of indefinite increase. Its extent is 

 limited, and the extent of the more productive kinds of it more 



1 Adapted from Principles of Economics, p. 130. (Copyright by Henry Holt 

 &Co.) 



'Adapted from Principles of Political Economy, Book I, chap. xii. 



