194 AGRICULTURAL ECONOMICS 



The assumption is that, if the produce of all these grades of 

 farmers, and no more, is in demand, Farmer F will just be able 

 to pay expenses, including a living for himself and his family, 

 but Farmer E can retain a profit of $100, D $200, C $300, 

 B $400, and A $500, because the more efficient farmers secure 

 larger returns in value, as a result of the same outlay, than 

 does the marginal farmer. This larger return may be due to 

 the ability of a more efficient farmer to secure more produce of 

 the same quality, or to produce a better quality of products, 

 or at the same time to produce more and of a better quality. 



The influence of variations in efficiency on rents and profits. 

 These theories of rent and profits point in the direction of the 

 truth but fall short of an accurate statement because they leave 

 out of account at least three important considerations, namely, 

 (i) the influence of variation in the efficiency of farmers on the 

 amount of competitive rent; (2) the influence of variations in 

 usefulness of land on the amount of profits ; and (3) the in- 

 fluence of the variation of the usefulness of equipments and of 

 hired laborers on rents and profits. Each of these points may, 

 to advantage, receive our attention. 



To illustrate the way these forces will tend to determine the 

 amount of rent and profits, let the figures in the following table 

 represent the value of the gross product that the farmers of the 

 respective grades can produce as a result of an outlay of five 

 hundred dollars for labor and for the use of equipments, our 

 fixed unit of expenditure on the different grades of land. It 

 will be assumed, in this illustration, that the more efficient 

 farmers always invest the given outlay in the more productive 

 forms of l>abor and equipments. In order to make this and the 

 foregoing illustrations include the element of variation in in- 

 tensity of culture, we have taken a fixed outlay for labor and 

 for the use of equipments, instead of a fixed area of land. If, 

 therefore, 100 acres be the area of sixth-grade land on which this 

 expenditure is made, less than 100 acres of the more useful 

 grades are likely to be cultivated with this same outlay, for it 

 is usually true that the more useful the land, the more intensive 

 the culture that is most profitable. 



