Farm production results from combining labor, capital in many forms, soil resources and management. Without anyone of these resources, no production would be forthcoming. A farmer's decision, then, is one of determining the form and amount of these various resources to combine. Many resources can be used in farming. Each variety of seed, strain of livestock, form of fertilizer and type of building or machine represents a different form of capital; in a like manner, soils of different productivity, or laborers and managers of different ability, represent different resources or factors of production. However, in a general way, the farm manager must decide on the amounts and combinations of those four major resources, labor, capital, land and management; while farmers generally use their own managerial qualities in the day-to-day and long-run decisions of the farm business, they also have the opportunity to obtain management advice from college specialists, county agents and soil conservation technicians, or even to hire managerial services from a commercial firm.
Heady, Earl O.
"Productivity and income of labor and capital on Marshall Silt Loam farms in relation to conservation farming,"
Research Bulletin (Iowa Agriculture and Home Economics Experiment Station): Vol. 31
, Article 1.
Available at: https://lib.dr.iastate.edu/researchbulletin/vol31/iss401/1