82 BULLETIN 1271, U. S. DEPARTMENT OF AGBICULTTJKE 
increase in value of the future product of the soil, and it is therefore 
impossible to evaluate accurately this fertility by-product of live- 
stock. Wherever livestock constitute an important part of the 
farming business, due consideration must be given to the matter of 
producing such feeds as can be produced more economically than they 
can be purchased. 
STATEMENT OF THE PRINCIPLE OF CHOICE 
Any one or all of the above-mentioned characteristics of farm 
organization problems may be present on particular farms. The 
problems are frequently complex and can not be solved by some 
simple formula. 
Having in mind these characteristics of the 'problems on his particular 
farm, the operator should choose such enterprises and in such propor- 
tions as can be combined into a well-rounded organization that will give 
him the best return for his supply of labor, land equipment, and mana- 
gerial ability. 
This is usually accomplished by choosing the one or more major 
enterprises that will add most to the net returns, and then supple- 
menting the organization with such other enterprises as will give a 
fuller utilization of the factors and procure a return sufficient to 
reward the operator for the additional managerial effort put forth. 
GENERAL PLAN OF APPLICATION OF THE PRINCIPLES OF CHOICE AND ADJUSTMENT OF 
ENTERPRISES 
The following illustrations are intended to point out how these 
data may be used in reaching a solution of such problems on two of 
the farms from which the data were collected. In these illustrations 
it is assumed that these farmers are attempting to secure the highest 
returns for the supplies of labor, land, livestock, work stock, machin- 
ery, managerial ability, and other resources under their control. 
The first step in these illustrations is a description of the resources 
of these farmers and an analysis of their present organization. The 
labor and material requirements for the enterprises on these farms 
are adapted from the data on " Unit requirements of labor and mate- 
rials for crops and livestock." The returns from the present organi- 
zation are estimated on the basis of ordinary yields and relative 
prices of the different products. Comparisons are made between 
the results secured from the present organization and the probable 
results from proposed organizations. 
In making these comparisons between organizations, it is also 
necessary to determine the differences in costs of extra hired labor, 
seed, twine, and other materials which do not constitute a part of 
the regular supply of resources. This analysis is based on the theory 
that when choice of enterprises is the objective, only those costs and 
returns which will be affected by the choice need be considered. 19 
Thus adjustments in the cropping system or the kinds of livestock 
being kept may usually be considered without regard to the question 
of overhead expenses, land rent, or other charges which are not 
alt ered by the choice. The effect of the choice upon the maintenance 
of soil fertility and the general longtime plan of farming which can 
19 For a further elaboration of t his point, the reader is referred to "The ohjeetives in agricultural cost 
accounting" by Dr. Jl C. Taylor, Journal of Farm Economics, vol. V no. 2, 1923. 
