L2 BULLETIN 659, r. S. DEPARTMENT OF AGRICULTURE. 



kri value. Similar conditions prevail in other good agricultural 

 areas, especially in the Middle and Western States. 



That farm lands in this county will continue to increase in price 

 al these high rates for an indefinite period is hardly to be expected. 

 However, they may continue to do so for some time. During the 

 Last census period the area of crops in the United States for which 

 acreage is reported increased only 9.9 per cent, while population in- 

 creased 21 per cent. During this same period the prices of farm 

 products increased on the average (57 per cent. Further increase in 

 the market price of farm products will have a tendency further to 

 increase the price of farm land. 



Another reason why the price of farm land is usually such that the 

 operating income from it is only 3£ or 4 per cent, lies in the fact that 

 the ownership of land is distinctly advantageous for many reasons. 

 Because of the fact that investment in land represents an almost ab- 

 solute security from loss of capital, owners are willing to accept a 

 low rate of interest on their investments. The independence of the 

 landowner is worth much to the average man. The land furnishes 

 a permanent, abiding place — a home — with all that this means to the 

 average citizen. Men will therefore pay a relatively higher price 

 for farm land than they will for most other investment properties 

 bringing the same income. 



In Table II are shown the average prices of land operated under 

 three typos of tenure. It will be noted that the income per acre to 

 owners where land is rented for cash represents but 2.4 per cent on 

 the investment of the oAvners, but as only a very small portion of the 

 crop area of any farm in this group is rented for cash, these returns 

 do not represent actual incomes from farms. The average percent- 

 age return on the investment for the 115 farms included in these 

 studies. 1 when converted to a uniform basis of operation for com- 

 parison, is 0.3 per cent. 



While the working owners make a very satisfactory income on the 

 investment, the landlords whose farms are operated by tenants are 

 satislied with a very much smaller return. They do not expect so 

 large returns because of the security of investment and expected 

 profits from advances in land prices in the future. The satisfactory 

 incomes of owners cover all the risks of farm operation, while the 

 returns to landlords from their land covers only a very small por- 

 tion of the risk, the greater pari being borne by the tenants. 



i Five of the L20 records taken were discarded. Only 11) records furnished complete 

 records on cost of production. In some of the tabulations only 109 records were used. 



