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Research Bulletin (Iowa Agriculture and Home Economics Experiment Station)

Abstract

Farmers have numerous methods of obtaining control of the productive services of resources. They can buy the resources outright and utilize their services. This is the main method by which the productive services of seed, machinery, feed, livestock and other forms of capital are obtained. Although a market exists whereby the services of machines and livestock (chiefly breeding stock) can be hired on a custom basis, farmers usually purchase the entire stock of services embodied in these resources and then utilize the services as they flow forth over time in the production process. At the opposite extreme, the services of labor are always hired; a market does not exist whereby a laborer and the stock of productive services which he represents can be purchased outright. Between these two extremes fall the services of land, buildings and other real estate. The entire stock of productive services embodied in real estate can be purchased and the farmer then becomes an owner-operator. However, the flow of productive services from land and buildings can also be purchased without resort to ownership. Services of real estate can be hired by tenant operators through various types of leasing arrangements. Real estate services may be purchased for a year or other period depending on the term of the lease.

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