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Research Bulletin (Iowa Agriculture and Home Economics Experiment Station)

Abstract

The objective of this study is to examine alternative methods for increasing incomes of farm families on Shelby-Grundy-Haig soils of southern Iowa. Prospects for increasing incomes through greater capital use, improved technology, larger farm size, part-time farming and shifts to non-farm occupations are considered. Linear programming is used in deriving optimum farm plans and farm size under various resource situations.

Plans are first computed for "typical" or modal resource situations on farms of 80, 160 and 210 acres, using current farming techniques of the soil area. These plans provide, for each farm size, a "benchmark" income figure for comparison of earnings from other farm and non-farm alternatives. The benchmark income for each farm size is first compared with incomes from farm plans where capital is increased and all other resources and technology remain at the benchmark level. Returns on this additional capital are high for all three farm sizes studied. Computed next are increases in income possible from use of improved farming techniques while operating capital and other resources are held constant at the benchmark level. Use of improved techniques with capital held constant also produces high returns. When improved techniques and greater capital are used together, however, the income increases are greater than from either used alone. This complementarity suggests a need for integrated educational and credit programs.

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