The daily star-mirror. (Moscow, Idaho) 1911-1939, 1922-04-27
THE FARMER and
HIS INVESTMENT
is ENTITLED TO RETURNS ON
HIS INVESTMENTS JUST AS
CORPORATION is

sued by the University of Idaho and
the federal department of agriculture,
and compiled by Professor Byron
Hunter, specialist in farm manage
ment at the university comments ex-
tensively and logically on the returns
which the farmer should receive for
his investment and from his labor.
The Statesman article follows
4 Interest on investment, working ca
pital, going concern value, labor costs
these are not subjects to be discus
sed only in relation to the business of
the man who produces electric power
or gas or water or transportation SER
vice. They belong just as much to the
business of the farmer
The corporation that manages a
public utility is entitled, men agree, to
reasonable return on the money it
has put into the business or put up
for working capital 1t should also
have a return for effort expended in
getting its business going, in making
it more valuable than it would be if
its property lay inert and motionless,
without supplies arranged for or con-
sumers signed up 1t should be reim-
bursed for the reasonable expense of
doing business.
So should the farmer.
The farmer invests money in land
and seed and machinery and livestock
The farmer must have certain
amount of money in the strong box
or the bank to meet his bills between
harvest and harvest This means in
vested capital and working capital.
The farm, too, has going concern
value, value that attaches to it be-
cause it is in motion, it's credit estab-
lished, its water supply provided for,
its bitches open and running full, its
market waiting for the product
And there is, of course, the cost of
doing business, preparing the soil,
tending it, hiring help and horses.
The efficient farmer deserves
proper return on these things just as
much as does the public utility. The
ingenious farmer makes sure he gets
it, He does it by choosing his crops
wisely, by cooperating with others to
keep the markets open, and in other
way If conditions force him to a
loss, he raises his voice and has con-
ditions changed.
A research bulletin recently issued
jointly by the University of Idaho and
the federal department of agriculture
discusses the relative profitableness
of seven crops in Twin Falls county.
1t is interesting to see how the auth
ors of the bulletin have taken into
in figuring the return
on the farmers investment, the very
elements of value involved in utility
cases. They figure the farmer is en-
titled first to a return on his invest
ment in land and chattelS and reserve
capital They figure he is entitled
next to reimbursement for his rum
ming expenses, and after this to
reasonable wage for himself and his
aired hands In their own words
Net profit or loss is gross value per
acre less net cost per acre.
Net cost includes interest on the capi
.al involved and wages for the labor
performed by the producer and his
horses. Let it be supposed that the
act cost of producing an area of GER
ain crop just equals the gross value
If the product. In this case the pro-
lucer receives wages for himself and
lorses and interest on the capital in
yolved in addition to other costs.
Thus the farmer, even if his farm
shows no profit as figured by these
research men, yet makes as much as
)ur state commissions permit the util-
ties to make, that is interest on the
investment and enough to cover all
salaries and expenses incident to the
business Whatever the farmer max
IS above this is pure 'velvet" from
he standpoint of valuation engineer.
The farmers of Twin Falls county,
to table XIV of the bulle-
in, made, in 1920, velvet of 80
cents on every dollar invested in al
sike clover seed and nine cents on
every dollar invested in sugar beets.
But as for clover seed, alfalfa hay, po-
atoes, beans and wheat, they did not
wen make reasonable wages, expens-
IS and a return on investment, all OF
which, by the way, we guarantee" the
Utility
Last years conditions demonstrate
,learly why it is desirable that the
armer's earnings should run into the
velvet in good years. Only by this
s the farmer reimbursed for the poor
,rop years and the poor price years
which, unless he is unusually wise in
against their effects, are
,ound to hit him now and then.