14 BULLETIN 1338, U. S. DEPARTMENT OF AGRICULTURE 
Farm income. — The difference between the farm receipts and the farm expenses. 
It represents the value that may be withdrawn from the year's business without 
reducing the farm capital. It does not include the family living from the farm. 
Labor income. — The amount left for the labor of the operator after interest on 
the farm capital is deducted from the farm income. (See Table 6 for rate of 
interest used for each locality.) In addition to labor income, the farmer receives 
the family living from the farm. A minus labor income means no returns above 
the family living from the farm for the year's labor of the farmer and lacking the 
amount indicated of paying the interest rate on the farm capital. 
Percentage return on capital. — The rate returned on the farm capital after the 
value of the farmer's labor is deducted from the farm income is the percentage 
return on capital. When the percentage return on capital is preceded by the 
minus sign, it means that the farmer did not realize even fair wages for his own 
labor and management, thus leaving nothing for the earnings on the farm capital. 
The labor income represents what the farm has earned from the year's business 
for the labor and management of the farmer after a charge for the capital has 
been deducted. On the other hand, the percentage return on capital represents 
what the farm has earned from the year's business for the capital used in the 
business after all farm expenses have been deducted and the farmer has been 
allowed a fair wage for his labor and management. 
Farmer's labor. — The value of the farmer's own labor is an allowance for the 
services of the farmer for labor and supervision at the rate at which he would 
have to pay another man to take his place. It is exclusive of the family living 
from the farm. 
Family labor. — The value of unpaid family labor is determined on the basis 
of what it would cost to have the same work done by hired help, or the amount 
of additional labor that the farm operator would have had to hire to carry on the 
same sized business had the family labor not been available. 
Adult units. — Each person under 16 years of age represents two-thirds of a 
unit, and each person of 16 years or older, one unit. 
Family income.- — The farm income plus the value of the unpaid family labor. 
It more nearly represents the amount available from the farm business for the 
farmer and his family to spend and save, provided there is no interest to pay 
on farm indebtedness, than any of the other items. It does not include any 
income from sources other than the farm business or the value of family living 
from the farm. 
Cost of living. — The expenditures of farm families. It includes items furnished 
by the farm and those bought. Food, clothing, house rent, fuel, other operating 
expenses, maintenance of health, and advancement are the important classes of 
items included. 
The average figures for each locality in Table 6 show the variations 
for the different farm business survey localities in respect to the 
several items given in the table. The average size of farms varied 
from less than 100 acres in some localities to over 1,000 acres in others, 
and the amount of capital from less than $10,000 to over $60,000. 
The average farm receipts were little more than $1,000 in Wash- 
ington County, Ohio, in 1921, and over $13,000 in Sherman County, 
Oreg., in 1920. In a few localities the farm income averaged less 
than $1,000 per farm, even in years of such agricultural prosperity 
as 1918 and 1919, whereas in the same years it exceeded $4,000 in 
some other localities. An average of less than $100 worth of farm 
labor was performed by members of the farmer's family (excluding 
the farmer himself) in several of the localities; but, on the farms 
operated by negro farmers in Sumter County, Ga., in 1918, the 
families (excluding the farmers themselves) performed on the aver- 
age over $300 worth of the farm labor. Although the average value 
of the family living from the farm varied from less than $300 per 
family in Polk County, Fla., where little more than half of the farmers 
lived on their farms, to over $600 in a few localities, yet it varied less 
for the different localities than any of the items just named. The 
family living from the farm was more stable than the farm receipts, 
the farm income, or the labor income. 
