1162 



Agriculture Abroad. 



[Mar. 



conditions on individual farms. Tf real estate improvements 

 are made, additional equipment purchased or additional live 

 stock added early in the year and used in the year's business, 

 the average of the investment at the beginning and end of 

 the farm year should be used. Should such changes in invest- 

 ment have occurred late in the year, the amount at the 

 beginning of the year will probably represent more nearly the 

 capital from that year's business. The total under the five 

 subordinate heads already mentioned will give the entire farm 

 investment on which interest should be charged. 



Under Receipts the sum of the four subordinate groups will 

 represent the total receipts of the farm, and in like manner, 

 the items which fall under the general heading of Expenses 

 will show the position for total outgoings. Farm Income is 

 arrived at by subtracting the total expenses from the total 

 receipts, the result giving the total money receipt for the use 

 of capital and workmen's wages. In calculating Labour 

 Income, it must be remembered that capital has an earning 

 power which at least equals the current rate of interest on well- 

 secured farm loans. Interest at this rate deducted from the 

 farm income gives the farmer's labour income. This last 

 represents the amount of money remaining to the farmer after 

 paying all business expenses and deducting interest on the 

 money invested in the business. In addition to the labour 

 income, the farmer has the use of the farmhouse and products 

 such as fruit, garden vegetables, dairy produce and fuel, that 

 are furnished by his land towards his living. The difference 

 between receipts and expenses will not necessarily correspond 

 to the money in hand or in the bank, as personal and living 

 expenses have to be paid out of this amount. A further 

 deduction will be interest on mortgage or other debts, together 

 with any principal paid. 



The object of this record is to ascertain how much the 

 farmer makes, not how much he actually saves. After the 

 farm return is known, the responsibility rests with the 

 farmer himself as to how much he will spend personally or 

 use in other ways. There must be a proper relation between 

 all the different classes of work carried on, and account 

 keeping will enable farmers to ascertain at once and with 

 -accuracy which of their undertakings are successful, and which 

 unsuccessful. 



