48 BULLETIN 1224, U. S. DEPARTMENT OF AGRICULTURE. 
cash-rented farms alone is not the important consideration, but the 
annual income and percentage of return on all farm land. Average 
cash rents show the former, but do they show the latter ? 
What is farm-land income ? It is necessary to get clearly in mind 
what is meant by this term before a decision can be reached whether 
or not average cash rents are an accurate reflection of it. In eco- 
nomic theory, land income is called economic rent, and it has usually 
been defined by economists as the amount that is earned annually by 
the bare land alone. This definition, however, is not descriptive of 
actual market conditions in this country. In the United States the 
price paid for bare land, for the improvements on it, and for the home 
advantages which are attached thereto are not separated in the mar- 
ket. The farm is bought and sold as a unit. The buyer acquires, 
and the seller gives up, the right to receive the total income which 
the farm, as a unit, yields. Land income, therefore, will be defined 
as the annual amount which land with all its improvements and the 
home advantages which are attached thereto earns, and this income 
will be called farm rent to distinguish it from economic rent. 
Like economic rent, farm rent is the amount that land will earn 
under conditions of free and active competition. Such competition, it 
is believed, prevails among the buyers and renters of land in the major 
agricultural regions of this county. Also, as in the case of economic 
rent, it is assumed that the land is improved and utilized according 
to the average intelligence of the community. A community 01 
unintelligent farmers can not make land earn as much as a commu- 
nity of highly intelligent ones. In both cases farm rent and eco- 
nomic rent will be determined by what the farmers who buy, sell, 
and lease land can make it earn. 
That part of the farm rent which is paid for a home is more than 
house rent. It is a payment for all the community advantages which 
are attached to a farm. The amount paid for the home advantages 
offered by a farm will vary for the most part with variations in pro- 
ductivity. The lands which yield a higher money return will attract 
and create a better class of farmers who will build up the social 
advantages of the community and be able and willing to pay a higher 
price for these farms because of these social advantages. Poor lands, 
on the other hand, yield low money returns and are operated in the 
main by a poorer grade of farmers. These farmers can not afford 
to pay as high a price for a home as the more efficient farmers on 
the better lands. 
The percentage of farm rent paid for home and community advan- 
tages does not, however, always vary exactly in proportion to pro- 
ductivity. There are cases where the factor of home rent creates a 
difference of $50 or $75 per acre in the value of land between two 
communities in which the land is equally productive. Such great 
differences in home rent are usually due to the existence of religious 
or racial groups who wish to maintain their unity. 
RELATION OF CASH RENT TO FARM RENT. 
Cash rent is the amount paid each year by a tenant to a landlord 
for the use of a farm. It includes payments for the land, the im- 
provements, and the home advantages afforded by a farm. So far 
it is similar to farm rent in that both are payments for identical 
things. But even so, it may be that cash rents on the average are 
