Recent Trends in Real Farm Income

ACH of the several ways of measuring the recent trends in farm income during the past ten years leads to the same general conclusions, namely: (1) that the sharp decline from 1919 to 1921 was followed by a marked recovery from 1921 to 1925 and by a fairly stable income level between 1925 and 1928; (2) that average incomes in the past four years have not been as high as in the prosperous year 1919-20 before the great price depression; and (3) that the recovery in farm income has not kept pace with the trend in incomes of other groups which in the past four years have exceeded the prosperous incomes of 1919-20. These conclusions may be derived from a review of changes in farm income either in terms of rates of return on capital used in farm production, or in terms of rewards for labor employed, or in terms of the buying power of money income in exchange for goods usually bought by farmers. It is the purpose of this paper first to review briefly the trends in farm income as reflected in the rates of return on capital and the rewards for labor as shown by the yearly published estimates of the Department of Agriculture, and then to indicate the recent trends in buying power of the farmers' money income, which we shall refer to as "real" in