Farm income
In United States agricultural policy, several measures are used to gauge farm income over a given period of time.
- Gross cash income is the sum of all receipts from the sale of crops, livestock, and farm related goods and services as well as all forms of direct payments from the government.
- Gross farm income is the same as gross cash income with the addition of nonmoney income, such as the value of home consumption of self-produced food and the imputed gross rental value of farm dwellings.
- Net cash income is gross cash income less all cash expenses such as for feed, seed, fertilizer, property taxes, interest on debt, wages to hired labor, contract labor and rent to nonoperator landlords.
- Net farm income is gross farm income less cash expenses and noncash expenses, such as capital consumption, perquisites to hired labor, and farm household expenses. It is a longer term measure of the ability of the farm to survive as a viable income-earning business.
- Net cash income is a shorter term measure of cash flow.
Farm income and balance sheet
The income statement measures the profitability of a farm business for a particular period of time, usually one year. The balance sheet measures the wealth or financial position of the business at a particular point in time by reporting the farm’s assets, debt, and net worth.
The Economic Research Service publishes the income statement and balance sheet of the Nation’s farm sector, and the farm sector financial statement for each state.
See also
References
This article incorporates public domain material from the Congressional Research Service document "Report for Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition" by Jasper Womach.