390 



AGRICULTURAL ECONOMICS 



the labor income is comparable with a hired man's wages when the 

 hired man gets a house and garden and some farm products. 



SUMMARY 



* Use current rate of interest on well-secured farm loans. 



The difference between receipts and expenses, or farm income, will 

 not necessarily correspond to the money on hand or in the bank, as 

 personal and living expenses have to be paid out of this amount. 

 Furthermore, in the case of farmers having mortgages or other debts, 

 the interest on these, as well as any principal paid, must come out of 

 the farm income. Therefore, the record of the farm business may 

 show a fairly large difference between the receipts and expenses, and 

 yet the farmer may not have any money to show for it at the end of 

 the year, owing to the fact that the funds have been spent for living 

 or for personal uses or have been put into other investments, such as 

 insurance and paying off the mortgage. The object of this record is 

 to analyze the farm business; that is, to ascertain how much the 

 farmer makes, not to determine how much he actually saves. Having 

 learned what the farm is returning, the responsibility rests with 

 the farmer as to how much he spends personally or uses in other 

 ways. 



