Returns
to Operators
Returns to operators, as with net farm income, is
a measure of the earnings of farm operators (defined as those
individuals who share in the risks of production and materially
participate in the operation of the business) from production
of commodities and farm business activities.
What is the difference between returns to operators and net
farm income?
Returns to operators differs from net farm income
only in the exclusion of income and expenses associated with farm
operators' dwellings. The difference in value between returns
to operators and net farm income is equal to the net imputed rental
value of farm operator residences. Net farm income is a farm sector
income measure and returns to operators is a farm business income
measure.
How is returns to operators utilized?
Returns to operators is used in determining the
financial ratios involving income to components of the farm balance
sheet because the balance sheet does not include farm operators
residencies.
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