xt7z8w38230v https://exploreuk.uky.edu/dips/xt7z8w38230v/data/mets.xml   Agricultural Experiment Station, Department of Agricultural Economics, University of Kentucky 1976 journals kaes_research_rprts_24 English University of Kentucky Contact the Special Collections Research Center for information regarding rights and use of this collection. Kentucky Agricultural Experiment Station Research Report 24 : May 1976 text Research Report 24 : May 1976 1976 2014 true xt7z8w38230v section xt7z8w38230v  ; The Potential For Increasing Net lncomes
 . On Limited-Resource Farms ln Eastern Kentucky
r  Fred J. Stewart, Harry H. Hall, and Eldon D. Smith
._ RESEARCH REPORT 24: May 1976
i University of Kentucky : : College of Agriculture
¥ Agricultural Experiment Station :·: Department of Agricultural Economics
» Lexington

 1
1
1
 

  , CONTENTS ,
i Page
List of Tables ................................................. iv
Figures ..................................................... v
List of Appendix Tables ........................................... v
introduction .................................................. 1
Survey Results ................................................. 4
’ Analytical Results ............................................... 4
Unrestricted Capital Borrowing .................................... T
Restricted Capital Borrowing ..................................... 10
Unrestricted Tobacco Allotment Leasing .............................. 10
Eliminating Tobacco Production ................................... 15
Policy Implications .............................................. 2]
Educational Programs ......................................... 21 i
Li Tlic Tobacco Allotment Program ................................... 23
· Summary and Conclusions .......................................... 23
U References ................................................... 24
A Appendix ................................................... 25
  iii

 »‘ FIGURE 1
Figure No. Page
1 Economic Area 8 and The Study Counties 2
· LIST OF APPENDIX TABLES
Table N0. Page
1 Linear prograrming tableau, animal-power farm, existing technology 25
2 Linear prograrming tableau, tractor-power farm, existing technology 30
3 Linear programming tableau, animal-power farm, improved technology 32
4 Linear programming tableau, tractor-powcr farm, improved technology 35
v

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be- .. , ,·-. ·s‘ Y. `.···,. ».— . . .... ,- ·· -· ·‘ ~‘ ‘ " "`
' .

 . LIST OF 'l`ABLES
’ Table No. page
o 1 Proportion of low-income farms in selected areas of the U.S., 1969 3
2 Selected characteristics of the population in jackson, Lee, Owsley and Wolfe
Counties, 1970 3
3 Characteristics of sample farms and farm operators by source of draft power 5
4 Crop and livestock yields for animal-power and tractor-power farms under i
existing and improved technology 6
5 Optimal enterprise combinations and net incomes for the tractor-power farm with
unrestricted capital 8
6 Optimal enterprise combinations and net incomes for the animal-power farm with
unrestricted capital 9
7 Optimal enterprise combinations and net incomes for the tractor-power farm ‘
using existing technology and restricted amounts of capital 11
8 Optimal enterprise combinations and net incomes for the a.nimal—power fann
using existing technology and restricted amounts of capital 12
9 Optimal enterprise combinations and net incomes for the tractor-power farm
using improved technology and restricted amounts of capital 13
10 Optimal enterprise combinations and net incomes for the animal-power farm
using improved technology and restricted amounts of capital 14
ll Optimal enterprise combinations and net incomes for the traetor—power farm,
restricted vs. unrestricted leasing-in of tobacco allotments 16
12 Optimal enterprise combinations and net incomes for the animal-power farm,
restricted vs. unrestricted leasing-in of tobacco allotments 17
13 Changes in tobacco allotment lease price required to change the enterprise
combination and the associated change in production 18
14 Optimal enterprise combinations and net incomes for the tractor-power farm
limited to $3,000 of total capital, restricted leasing-in of tobacco allotments and
no leasing-in 19
‘ 15 Optimal enterprise combinations and net incomes for the animal-power farm
limited to $2,000 of total capital, restricted leasing-in of tobacco allotments and
no leasing-in 20
16 Preferences of low-income farmers for five enterprises 22
iv

 THE POTENTIAL FOR INCREASING NET INCOMES
ON LIMITED-RESOURCE FARMS IN EASTERN KENTUCKY
by
Fred . Stewart Harr H. Hall, and Eldon D. Smith*
7
INTRODUCTION existing farm resources. Many have already
. . . mi rated to lar er metro olitan areas in search
Poverty, according to the National Advisory fg 1 g B P d H.H _ M _
Commission on Rural Povertt ` al O cmp Oymcnt [ mwn an 1 CI-il' ` am
y ,1S more prev ent . . .
. . . others, despite chronically high unemployment
in rural areas of the U.S. than rn metropolitan . · ·. .
. . rates in the area, have sought ofi—tarm
areas. ln rural areas, lt 1S more prevalent among cm 10 mem Those who have mi ated have
farm families than among nonfarm families. The P Y ` gT ·
. . . tended to be younger and better educated than
Commission further found that poverty 1S not . .
. . . _ the general population [Lytjes]. Consequently,
uniformly distributed among the rural . . ·
. . . there IS a residual of older, poorly educated
population but IS more concentrated ID some f ers Whose rind al Viable O tion is to use
areas than in others. Appalachia, including . . P P P .
. , existmg farm resources more effectively. In
roughly the eastern OH€·[llIl°d of Kentucky, was . . . . V _
— · . . . . . add1t1on, there is evidence that many who have
one such area identified by the Commission. mi ated from the area would like to mmm
One measure of the extent of rural poverty gr . . . . , `
. , . . . even at some sacrifice of income, rf mey could
in eastern Kentucky is given in Table 1. . . . .
. . . . earn at least a minimal income [Werdeman] .
Economic Area 8 (Figure 1), compared with
eitl1er the rest of Kentucky or the entire U.S., Purpose and Objectives
fsrsmi lmuch higher proportion O IOW mcomc The purpose of tl11s study was to identify
.' . . , . any possibilities for improving farm incomes (as
l·arm incomes in Economic Area 8 are low . . . _ ~ .
. . .. distinct from nonfarm incomes) on farms in
for a variety ol reasons. ltrrst, famis are small, . . . _ _
. . eastem Kentucky. The major obiectrves were.
averaging 114 acres in 1969. Second, much of ‘
the land in these farms consists of steep hillsides 1. To describe the farm operations ot
which are either wooded or badly eroded from full—time Appalachitui farm operators who had
past cultivation, providing only marginal gross sales less than $5,000 in 1969. This 1
amounts of pasture at best. Thus, even if the description was to include quantities of l;u1d and
YCSUUICCS on these farms were used at maximum labor resources, types ol farm enterprises, 8.11Cl
Qffieiency, at prevailing prices, the resulting management skills as reflected by crop yields
ll`lC()fTlCS would necessarily be small. and animal production.
Excluding public assistance, three options 2 TO estimate the potential incmascg in
mmilicspigxgllog mciimciraic tdvdlidglc     net farm incomes from given resources. Changes
Off farm is area` mm a.C O O _l.rar ’f in the enterprise mix or improvements in the
Cmp Uymcnh Or lmpmvt mcomh mm technology employed were viewed as two
possible sources of such increases.
Dhf·‘\$fi€ultural economist, Natural Resource Economies   To l(lCl1lll`y 110X\l`€SOl\l`CC t`Ol\$tl`.lll1l$ 10 · I
ssion, Economic Research Service, United States Department . . '. . ‘ · , . · ,. . . ,.t
or A¤;c,,],u,c and [umm, march mmm, 3, thc University of the realization of higher incomes and to sugrts
Ecrrtuclty; Associate Professor of Agricultural Economics. mC2iSllfCS for I`ClllU\’lI‘\g Ol` all least I'€l;lX111g Ll`tt`sL`
`nrvcrsity of Kentucky; and Professor of Agricultural -
LC0¤0miCs, University of Kentucky, rcspcclivcly. Tllt l’€l€3|’€h COnStr€untS°
f¢p¤rtcd here was conducted under Hatch Project 98, "Pctcntin| .11 S d _ A
Z0? Inelizasing Net Farm lncgmcg on Low—Inc0mc FHYIDB in lc tu   rea
astcm cntucky." _ , _ . , _
Four counties in Economic Area b ——
. Thc I"€I`|'l1Il'ldC\’ of   KCDIUCRY is in ECODOIUIV ·]‘\Ll\s()n’ IJKLI   bllx ` ·‘{1({   `)iit    
Ana 9- *€0¤l·¤lilling area with vcry little agriculture, WCYC SClCClt`(l lt\l` SI\l(`l§'. rl lll`CC C1I`C\l1l`tSI.\llL`€$ led

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 3
TABLE 1
Proportion of low-income farms in selected areas ofthe U.S., 1969
 
Ana Gross Farm Sales Gross Farm Sales
LCII (hill $2,500I Legg [hg]; $§’()00b
 
—-·-—percent·--—-
United States 36 51
Kentucky 52 70
Economic Area 8, Kentucky 75 88
 
3 Class 6, part·t.ime, and part-retirement farms.
bClus 5, Class 6, part-time, and part-retirement farms.
Source: 1969 Census of Agriculture. -
TABLE 2
Selected characteristics of the population in
jackson, Lee, Owsley and Wolfe Counties, 1970
 
jackson Lee Owsley Wolfe Total
 
Population 10,005 6,587 5,023 5,699 27,314
Rural population (percent) 100 100 100 100 100
Rural farm population (percent) 45 18 43 38 37
Unemployment rate (percent) 13.0 12.9 8.5 7.9 11.1
Families below poverty levela (percent) 49.9 48.4 61.6 59.0 53.6
Ntunber of farms 1,225 454 687 631 2,997
Commercial farmsb with sales under $5,000 (percent) 41 37 45 39 41
Average farm size (acres) 88 B4 91 140 99
Farm! hifvesting 1—9 acres of croplandc (percent) 60 69 72 61 64
l E A 8 AVCTAKC nge of farm operator 52,1 55.1 51.0 55.4 52-6
  -
( aPoverty level is family income under $3,200.
l b ,
( Does not include part-time and part-retirement farms with gross farm sales less than $2,500.
clncludes harvested hayland.
Source: 1970 United States Census of Population, 1969 United State.: (.'cm‘us of Agriculture. (

 l
1 ( l to this choice: (1) these counties had a high years). Nonetheless, they required less time than (‘
( g concentration of commercial-farm operators mules for most field operations. Consequently; }
with low gross sales (41% were below $5,000 in the farms surveyed were classified into one ol
, 1970), (2) a high proportion of family incomes two groups——tractor—power farms or
{   were below the poverty level (53.6% were below animal-power farms--depending on the primary
_( ( in 1970), and (3) off-farm employment source of draft power. "
opportunities were very limited, as reflected by The survey results by type tif farm art
V the high unemployment rate (11.1% in 1970). summarized in Table 3 along with the overall _
( · These and other characteristics of the four results. Animal-power farms were smaller, on the Nu
counties are summarized in Table 2. average, than tractor-power farms (89 total acres
( L For purposes of this study, a low-income vs. 127). Agricultural production or; Op
farmer was defined to be a full—time farm animal—power farms, measured in either quantin
» 1 operator under 65 years of age whose gross farm or value, was smaller than on tractor—power
l sales in 1972 were less than $5,000. A survey farms. Operators of animal-power farms were
. . was planned to include 120 low-income farmers older, had higher disability rates, and had fewer M
in the 4 counties, with the number in each children. Consequently, the family labor suppl-.
, ( ( county proportional to the number of farms in was smaller than on tractor—power farms. 'l`ln:~.
classes 5 and 6. Since no list of low-income animal—power farms have smaller amounts rr:
farmers was available, a two-stage survey was both land and labor, and many of their fielti
r used. In the first stage, the county highway map operations require more time. ll
( . was divided into segments, each containing 10 In the subsequent analysis. animal—power
farms. Within randomly selected segments, then, farms and tractor—power farms were treated
. every farm operator was interviewed to separately. For crop enterprises, animal-powe:
determine whether he was alow-income farmer. farms were assumed to require more labor and La
( This process continued until the required less capital per unit of enterprise tlr.r:;
number of low-income farmers was found. In tractor-power farms. Some crop yields nz:
; ( this first stage, 40 segments were selected and animal-power farms, according to the survex
379 farmers were interviewed before 120 results, were also lower. Since the data showed
_ ( low-income farmers were identified. no appreciable differences between the tin _
‘ In the second stage,• a more detailed farms in livestock enterprises, they are assumeti
questionnaire was administered to the 120 to be the same for both classes of farms.
low-income farmers identified in the first stage.
_ Of the 120 interviews conducted in stage 2, 102 ANALYTICAL RESULTS . T,
. resulted in usable questionnaires, and these F ml _ { t. ( . ( __ _ ,
. provided the principal data source for the results Or CMI SH   . arm? (‘lmm`l(`pOl`°r .`u_(°‘
reported in the remainder of this report. Both tmctoriliowcrh il ilplmlm 1`CPr€S€nmm(C mm
. ( questionnaires are available in Stewart (1975). was dctmcd’ mq its Optwlls were ¤¤==l>l~l bl
. linear programming. The animal-power larm had
SURVEY RESULTS less land, less family labor, and less tobactv Dl
base; but it was permitted the same amounts til -
( Among the 102 farms surveyed, the average hired labor (see Appendix Tables l—~4). "i
l CduC3.tiO1'1 of the OpCr8tOI` W3.S 6.5 ye3.I`S. The Two levels Of teghntilggy .- existing anti
l average operator owned 81 acres of farmland improved -— were considered in the analysis. ·
l ( and rented an additional 24 acres. Of this 105 Existing technology consists of yields, physical
  *_ HCYCS of land, roughly 69 3.CI`€S (65%) was inputs, and requirements for capital and labtrt ·
(   ; woodland. These farms had very few livestock. observed in the survey. Under existills
    Most of the farm income was derived from technology, crop yields on the animal-pwer and, consequently, it existing bam space. (Curingbam space for
nology had higher labor requirements in many share-leased tobacco is assumed to be provided
·····— enterprises [see Appendix Tables 1-4]. with the lease.) Borrowed capital may not be
To estimate yields under existing used to buymore land, of course, and all pasture
.*:00 technology for enterprises not observed in the requirements must be supplied from owned
$003 survey was impossible, of course. Moreover, land. The lease price for tobacco allotment is V
Alto there was no way to determine how readily, or assumed to be 20 cents per pound.
2_5 cven ii`, farmers would adopt new, unfamiliar Results for the tractor-power farm are given
2.0 enterprises. Finally, there was no established in Table 5 and those for the animal-power farm
*00 market for the output of enterprises not in Table 6.3 According to these results, the
8'0 observed in the survey. Consequently, only tractor-power farm could increase its net income
enterprises observed in the survey were $1,900 with no change in technology, by
.000 considered in the analysis. · U I growing more profitable crops and by h
'360 A complete list ofthe activities considered substituting dairy cows for beef cows. Similar
7.2 is contained in Appendix Tables 1-4. In changes in enterprises on the animal-power farm
1.. addition to production activities (crop and would increase net income by $1,865. ln both
livestock), the following activities were allowed cases, changes in crop enterprises include
S in one or more of the subsequent analyses: increases in the quantities of tobacco,
  1- Bm, or SCH com- cucumbers,   peppers. The increases. in
l · tobacco production require leasing-in sufficient
  2· Bur or SCH haY· tobacco allotment to fill curing-barn space.
  3- B0“0“'€aPlt0l· Adopting improved technology as well as
E 4. Hire labor. more profitable enterprises increases net
{ ;,_ Lcascjn [ObaCcO ullotmoog incomes an additional $2,009 on the
i 6. Build tobacco cooogoom coocc. ¤é¤t¤r·P<>-’¤r lem md $1»76i’ OIT _ the
an1mal·power farm. Only m.nor additional
7. Share—lease tobacco. . . . .
I changes in crop enterprises are indicated, but
Three types of capital were defined: operating feeder pigs replace dairy cows. Under assumed
capital, animal capital (for buying breeding prices, most of the com required for the pigs is
animals), and building capital (for adding purchased rather than grown on the farms. The
curing-barn space, hog houses, or milking maximum net income on the animalpower farm _
parlors).2 All pasture requirements were is lower than that on the tractor—power farm
assumed to be supplied from owned land ($5,248 vs. $6,571) largely because the
resources. animal-power farm has less land.
The effects of factors other than technology Many of the enterprise changes require
were also analyzed. For example, the effects of increasing the amounts of labor-intensive
limitations on the amount of capital borrowed, enterprises, thus increasing the labor
of changes in the regulations governing the use requirements. Moreover, despite the apparent
of tobacco allotments, and of eliminating gain from leasing-in tobacco allotment, very
tobacco production entirely were considered. little was reported in the survey. Similarly. the
, . . . o>timal acrea es of cucumbers and e pers are
Lmcstnctcd Capital Bmimwmg stibstantially iiirger than those obseagd in the ,
This section examines the effects of survey. Finally, capital requirements increase `
unrestnctc—i capital use with the given land, dramatically when feeder pigs are added as an
labor, and other resources. Each farm is -_____.._.
permitted tu borrow any amount of capital,
Subjcct Only {O a 7% Interest Charge. Thc Only 3The various computer runs are identified by symbol. T~lE. _
 ———····—— for example, is the Fmt run with the u·a•:tor~pov•vr farm usim. ,
existing technology. Descriptive headings for the same run differ
2 I- l · · U from table to table depending pn the   C0|?d.itio¤s . .
lnvextmcnt in rxmunq hmldungs was viewed as "sunk costs" being analyzed. The symbol designation (c.g. T·1E untformh
with negligible salvage value. appears in the heading irrespective of the descriptive beading.

 p 8
° TABLE 5
` Optimal enterprise combinations and net incomes for the
tractor-power farm with unrestricted capital
>  
2. Existing improved
, Observed Technology, Technology, "'
Enterprises Optimal Optimal
(T-1 E) (T-11) 4
4.
Net Income $2,662 $4,562 $ 6,571
` Crops (acres) N,
Tobacco on bottom land 0.8 1.0 0.8 C,
. ` Tobacco on shares 0.9 0.9 0.8
Corn on bottom land 3.1 0 0 _
Cucumbers on bottom land 0.1 2.0 1.5
Peppers on bottom land 0.2 1.1 1.8
_ Peppers on rotation land 0 2.6 2.0
1 Hay on rotation land 0 4.2 5.4
Hay on pasture land 9.2 9.4 9.6
Livestock
Dairy cows (manufactured milk) 0 6.1 O
Beef cows (sell feeder calves) 5.8 0 0 Lg
Sows (producing feeder pigs) 0.5 0 44.0
’ Other Enterprises
Sell hay (tom) 6.5 12.9 37.3
Buy com (bushels) 0 O 1,910 O.
Sell com (bushels) 119 0 0
Hire August labor (hours) 55 100 100
Hire October-December labor (hours) 0 0 45
` Lease·in tobacco allotment (pounds) 0 443 443
` Capital Requirements
` Operating capital 5 745 $1,394 S 4 ,276
Animal capital 616 1,145 4.088
Building capital O 609 9,020 (gl
Total capital $1,361 $3,148 $17.384
 
1 l .
i ;
1 g i
  ,
1 .  ll

 ( 9
TABLE 6
Optimal enterprise combinations and net incomes for the
#1 animal-power farm with unrestricted capital
nprove
:hnology_  
)ptimal Existing Improved
(T·l1) · Observed Technology, Technology,
.- Enterprises Optimal Optimal
a 6,571 (ME) (A-11)
Net Income $1,621 $3,486 $ 5,248
0·8 Crops (acres)
0.8
0 Tobacco on bottom land 0.8 O 0.6
I 5 ‘ Tobacco on rotation land 0 0.8 0
,.8 Tobacco on shares 0.7 0.6 0.5
.,i0 Corn on bottom land 2,2 () 0
5 4 Cucumbers on bottom land 0 1.7 1.3
9.6 Peppers on bottom land 0.1 2.4 2.2
, Peppers on rotation land 0 0.6 0.6 ‘
Hay on rotation land O 0.6 1.5
0 Hay on pastutc land 7.8 0.2 0
0 Livestock
44.0
Dairy cows (manufactured milk) 0 5.7 0
Beef cows (sell feeder calves) 1.8 O 0
373 Sows (producing feeder pigs) 0.2 0 44,0
1-910 Other Enterprises
O
100 Buy hay (tons) 0 12.6 0
45 Sell hay (tons) 0 0 5.8
H5 Buy com (bushels) O 0 1_89Q
Sell com (bushels) 118 0 0
Hire April·May labor (hours) 0 O 22
S 4.276 Hire August labor (hours) 55 100 10
{088 Lcase·in tobacco allotment (pounds) 0 552 $5*2
9.020 Capital Requirements
$17-384 Operating capital $ 486 $ 905 S 3.368
Animal capital 288 1,075 4.048
Building capital 0 570 8,952
Total capital S 774 $2.546 $16,348
 

 ` 10
· enterprise. Whether farmers are willing to make (feeder pigs). (
these kinds of changes is an unanswered Net incomes, however, are affected more 1
_ question. For capital, ability to borrow may be severely than with existing technology. Un the
Z 1 _ ‘ more of a limitation than willingness, and the tractor-power farm, if no more than $3,000 of
, i next section examines the effects of restricting capital can be borrowed, net income is reduced
the amounts of capital borrowed. by nearly 6% (from $6,571 to $6,200); if no
Restricted Ca ital Bormwin more than $1,000 can be borrowed, netgmconie ""
P g IS reduced by more than 16% (from $6,571 to
1 In this part of the analysis, borrowing a unit $5,493). On the animal-power farm, it no more
· of either operating capital, animal capital, or than $2,000 can be borrowed, net income is -·-
building capital requires, in addition, a unit of reduced by nearly 10% (from $5,2-18 ttt M1
· - , "total capital." Limits on the quantity of total $4,762); if no more than $1,000 can he Cm,
? capital were increased in increments of $1,000 borrowed, net income is reduced by more that T(
up to the point that the increase in net income 13% (from $5,248 to $4,562). These inccmc T,
. was less than $100. That point was $3,000 for effects are due largely to decreases in tilt- C,
, ? the tractor-power farm, $2,000 for the numbers of feeder pigs, which are much mort Pr
1 animal-power farm. profitable under improved technology than 1*
, An interest charge of 7% was made on any under existing technology. E
i Capilal bm-rOw€d’. as difscribcd ifi the Previous Unrestricted Tobacco Allotment L-,
. section. Once again, neither adding curing-barn Lcasin "°
_ space nor buying more land was allowed, all g D
, pasture requirements had to be supplied from Leasing of burley tobacco allotments has 0,,,,
1 owned land, and the lease price for tobacco been permitted since 1971, when allotmeri: Sl
( t allotment was assumed to be 20 cents per allocations were changed from acreage tt H
pound. poundage. Such leases may not exceed 5 years. L
. . - and the lessee and lessor must reside in the same
, t Exzstzng Yechnology . . . . _ . _ Cav
county. lf this within-county restriction wart
_ Table 7 reports results for the tractor—power removed, some allotments might move fror:  
; farm and Table 8 those for the animal·power counties where labor is scarce and relatively j,
1 farm. Both farms again emphasize tobacco, expensive (e.g., counties in the Bluegrass area) it
cucumbers, and peppers, just as they did when counties where labor is frequently in execs
V _ 1 the amounts of borrowed capital were supply and, therefore, less expensive (et. —
A unlimited. Both farms reduce the number of counties in Appalachia).
dairy cows, however, and since pasture ln this part of the analysis, unlimited capita
requirements are reduced accordingly, both borrowing is permitted once again, subject oiiit
» h increase the quantity of hay harvested (and sold) to a 7% interest charge. For any allotment leascb
1 from pasture land. On the tractor-power farm, if beyond what can be accommodated in existing
as much as $3,000 can be borrowed, net income curing-barn space, additional barn space must bi
. is reduced negligibly (less than 1%). If no more constructed. Borrowed capital may be used ltr?
j than $1,000 can be borrowed, however, dairy that purpose, but it cannot be used to buy land
t , 1 cows disappear completely and net income is All pasture requirements must be supplied fvttl
i l reduced more severely. Net income on the owned land, and the lease price for tobactt
_ _: animal·power farm is virtually unaffected by allotment is assumed to be 20 cents per l.)O11111l~
e E _ A limitations of either $1,000 or $2,000 on The charge for additional curing-barn sp¤1<1
l Q A borrowed capital. is the annual amortized cost, assuming a 40 $111
    life for the barn. In reality, such ;ui im·estm¤‘111
Q   Improved Technology would probably not be made unless a least 11
{ j . Table 9 reports the results for the more than 5 years' duration could be assured.
  i ` tra.ctor·power farm and Table 10 those for the No explicit assumption is made about w111`1"
1 _ animal-power farm. With improved technology, long term leases would be obtained. An implitli
 _   - limitations on capital borrowing affect assumption, however, is that, if they are 1111
, i`   enterprise combinations in much the same way available locally (within the county), they 1*1
1   _ i 21S with existing t€ChI`10lOgy. Both farms still be obtained from other counties. ln reality.¤1111‘
 .   1 ; emphasize crops —- tobacco, cucumbers, and again, allotments could be obtained from 011111
 2   I 1 peppers — and reduce the number of livestock counties only if present allotment resn‘i€111‘1“
t,  t

 1 1
cd mor; TABLE 7
1 1 . . . . .
  Optlmal C1'l[CI`p1`1SC COH'l1)11'l2l[101lS and nct lI'lC()ITlCS 1`Of [11C
· 1 d Od tractor-powcr farm using existing technology and
fc _u°c rcstrictcd amounts of capital
J): 11 110
P ‘{‘“‘;“‘° Unlimited $1,000 $21,000
bvi)7 U1 Capital Capital Capita}
no more (T-IE) (T·2E) (T-BE)
ICOITIL 15
,2,18 (U Nct 1ncr·mc $4,562 $3,944 $4,542
Clin 1)C CIUIN (ICICI)
10)-C dm) Tnbwctw on bottom land 1.0 1.0 1.0
5 111*Cmf Tobacco on sharcs 0,9 ()_9 ()_g
5 111 tilt Cucumbcrs on bottom land 2.0 2.6 2,0
ich HUA-L1 P(·p(1gr5 nn b4)110fT1 land   0_5  
Jgy thgul Pgpncts on rotation land 2.6 $.1 2.7
' Hai; on rotation land 4,2 3,] 41)
llay on puturc land 9.4 4.7 10.2
It Livcntork
1)a1.ry1;1>ws(manufacturcdmilk) 6,1 () 5_5
T\€“t$ 11115 Othcr Entcrpriscs
aummcnt $111 hay (16111) 12.9 16.21 15.6
Zrcngc 1* Hirc August labor (hours) 100 100 100
C1 5 }'€L11$. 1,e·asc·1n tobacco allotmcnt (pounds) 443 4-43 443
T1 fhc Sami Capital Rcquircmcnts
il 1'1 \ 'CY1
19 if F Operating capital $1,394 $1 _()()0 $1 _4()j
‘O‘° _1°y·· .111111111 ¤1p11111 1,145 0 1.045
1612*11)%) Building capital 609 0 555
iss area) lf
in C\CCSS Tutalcapital $3,148 $1,000 $3,000
'  
lSl\'C (e.i.1
itcd capiti
ibjcct 0111)
ncnt lenséc
in existing
icc must 
bc uscd lic
o buy 12111C~
pplicd 1:1111
lor t0b;1c0
per pound.
g-barn $11.111
ng L1 40 \`C.lZ
1 111\'CSUYll`1ii
1s L1 1cas€~‘Y ·
bc Q\SSl11’t`d~ -
tbout whi‘1<`
. A11 implitiz
hey tire 11Ui .
1*), tlicy 111
reality 011fl
1 from 011111 Q _
Q 1`€S11`1C1101l1

 1 2
A TABLE 8
Optimal enterprise combinations and net incomes for the
P animal—power farm using existing technology and
restricted amounts of capital
 
Unlimited $1.000 $2 ,000
Capital Capital Capital
(A-1E) (A-2E) (A-SE)
 
Net rnwmc ss,4s6 ss.4so gm;. N“‘ l"°
Crops (acres) com (
V Tobacco on rotation land 0.8 0.8 0.S  
Tobacco on shares 0.6 0.6 0.6 Tom
Cucumbers on bottom land 1.7 1.4 1.2 CO
Cucumbers on rotation land 0 0.6 0.6 PUC)
Peppers on bottom land 2.4 2.7 2,9 PCM
I . Peppers on rotation land 0.6 0 0  
Hay on rotation land 0.6 0.6 0.6 Hag,
Hay on pasture land 0.2 7.0 2,3 ’
Livestock Lwcito
( _ _ Dair
Dairy cows (manufactured rmlk) 5.7 1.2 4,8 Sow
Other Enterprises Othcr 1
` Buy hay (tons) |2.6 O 4.4 SCH
Sell hay (tons) 0 13.8 0 Buy
Hire August labor (hours) 100 48 $5 myc
Lease-in tobacco allotment (pounds) 332 552 $$2 Him
Capital Requirements U¥
Operating capital S 903 S 657 S 759 C°P1'*
‘ . Animal capital 1,07 3 224 si ti Opt
Q Building capital 570 119 4 S1 Am
_ Buil
Total capita! $2.546 $1,000 $2.000
_   T
1
1
1
1 .
1 ( r
1
»   .
E
  1
. i V (
 .   L
1 i 1
 {   1

 1 3
TABLE 9
Optimal enterprise combinations and net incom