Farm income is a
statistical indicator of the income from
farming
Agriculture encompasses crop and livestock production, aquaculture, and forestry for food and non-food products. Agriculture was a key factor in the rise of sedentary human civilization, whereby farming of domesticated species created ...
for a particular country per year or some other period. This statistic is used by governments to determine agricultural policy and performance of the agricultural sector by financial markets.
In
United States
The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
there are several different gauges of farm income that are used for agricultural policy. These include:
*''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.
In the United States the
Economic Research Service
The Economic Research Service (ERS) is a component of the United States Department of Agriculture (USDA) and a principal agency of the Federal Statistical System of the United States. It provides information and research on agriculture and ec ...
publishes the income statement and balance sheet of the Nation’s
farm sector, and the farm sector financial statement for each state.
See also
*
Off-farm income
References
{{Authority control
United States Department of Agriculture
Agricultural economics