Results 



Estimates of income to land and labor are summarized in tables 1 and 2. 

 Income to management, presented in table 3, is the difference between income 

 to landowners leasing to tenants and to those leasing to croppers. When 

 estimated from both enterprise and whole farm budgets, returns to land and 

 labor in North Carolina continued to increase throughout all the periods 

 selected for study. The same was true of returns to land and labor in 

 Virginia when estimated from enterprise budgets. For both tenant and cropper 

 farms in North Carolina and for cropper farms in Virginia, percentage in- 

 creases in land income greatly exceeded those in income to other factors of 

 production. Thus, when considering increases in income to laborers and land- 

 lords, the landlords generally faired better. 



The indication in table 3 that management has a greater value in southern 

 Virginia than in North Carolina is subject to question since tobacco yields 

 and prices are lower in Virginia. The questionable results in table 3 suggest 

 that tenure arrangements in these two tobacco growing areas cannot be consider- 

 ed comparable when estimating returns to management. 



As pointed out above, estimates reveal that, since 1920, income to land- 

 owners increased much faster than that to labor in both areas. A basic reason 

 for this is that before the tobacco programs were introduced costs to land- 

 owners were about as large as gross returns to them, making the return to land 

 not much above zero. However, after the programs were initiated, their gross 

 returns rose at a greater rate than their costs, causing a dramatic rate of 

 increase in net returns to land. Simultaneously, since the cash expenses for 

 production are a much smaller proportion of gross returns to the tenant than 

 of the returns to the landowner, changes in the ratio of production costs to 

 returns affected labor income less. Also, an increase in yields in the periods 

 studied increased the labor requirements per acre, and this restrained the 

 rate of increase in income per hour of labor. 



The data from enterprise and farm budgets used in this study were not ob- 

 tained in such a way as to provide estimates of variances or standard errors. 

 In the absence of such estimates, a sensitivity analysis was made to ascertain 

 how given percentage changes in gross returns, overhead costs, and operating 

 costs would affect the estimates of land and labor returns. The specific per- 

 centages of change used in the analysis were assumed to be 10 percent for 

 overhead coat and value of perquisites; 5 percent for gross returns, cost of 

 works tock, and operating costs; and 2.5 percent for hours of labor required. 8/ 

 A summary of the results of this analysis is presented in figure 1. 



8/ These percentages were estimated as the standard errors in the enter- 

 prise and farm budget data used in this study. The estimates of standard 

 errors were based primarily on calculations from data in the budgets for 

 Virginia in the studies made during the 1920* s and 1930 's and were generally 

 consistent with those estimated from recent and unpublished data collected by 

 the North Carolina Agricultural Experiment Station. 



