Aspects Of Farm Profitability: An Outmoded Concept? Presidential Address

The paper begins by recording Journal articles since 1952 of relevance to farming incomes and efficiency, and follows by reviewing the literature on measuring farmers' incomes and the problems entailed, including consideration of non‐farming incomes and capital gains and their relevance to agricultural policy. Definitions of ‘profit’ in selected economic texts are then compared, together with attempts to measure ‘pure profit’ from farming. Suitable charges for management and interest are then determined and estimates made of net profits and losses from different types of farming in 1986/7 and 1987/8 for both average and ‘top’ farms. Real farming incomes and capital gains from land from 1938 to 1988 are then discussed. The paper concludes by summarising why the concept of profitability from farming has now largely lost its significance—though not for all farmers.