The overall objective of this study was to explore the possibilities for improving the net farm income positions of full-time limited resource farm operators in Upper East Tennessee. The improvement in income was based on the optimal employment of available resources to produce a unique enterprise mix which maximized income.
Forty full-time farmers with gross earnings of less than 10,000in1976wereinterviewed.Fivedecisionvariableswereusedtogroupthesurveyfarmsintohomogeneouslimitedresourcefarmgroups.Thesevariableswereland−laborindex,tobaccospaceindex,dairyenterprisepotential,netincomeobservedforeachfarm,andpotentialnetincome.Resourcesofafarmwereusedinalinearprogramtomaximizetheincomesofeachfarmandtheresultsaveragedwithintheappropriatelimitedresourcefarmgroup.Sevensituationswereanalyzedwhichvariedtheassumptionsandconstraints.Theanalysesweredividedintotwocategories:(a)thoselimitingenterprisealternativestothosethatexistedonafarmwhensurveyed,and(b)thoseallowingvaryingdegreesofenterprisemobility.Eachanalysisincorporatedeithervariableexpensesintotheobjectivefunctionwhichrepresentedashort−runsolution,orvariableandfixedexpenseswhichrepresentedalong−runsolution.Theresultsofthesesituationsrepresentedtheincomepotentialoflimitedresourcefarmersrangingfromincorporationofstatictodynamicconditionsintothemodel.Theresourceadvantagesofthedifferentlevelsofresourcebasefarmerstendedtodeclineinrelativeimportanceasincomegeneratinglaboravailablewasfullyutilizedforalllimitedresourcefarmgroups.Themostlimitedresourcegroupoffarmerswasobservedtohaveanetincomeof1,319 while the relatively least limited resource group of farmers had an income of 15,533.Whenfeederpigswereallowedtoenter,incomeswereallowedtobemaximizedthemostto7,208 and 22,846forfarmsinGroup1andGroup4,respectively.Themajorenterprisesgeneratingthisincomewerefeederpigs,corn,pasture,andtobacco.Disallowingfeederpigproductionandallowingthesubstitutionofhayandtobaccocapacitywasthenextbestalternativeforthelimitedresourcefarmgroups.Thissituationhadtheeffectofdoublingtobaccoproductionoverobservedbenchmarklevelswhileleavingtheotherenterpriselevelsunaffected.Theleastdynamicprogramrestrictedenterprisesallowedtothoseobservedonafarm,allowedfornovegetableorfeederpigproductiononfarmswheretheseenterpriseswerenotobserved,allowedfornosubstitutionofhayspacefortobaccospace,andlimitedtheamountoftobaccoquotaleased−into1,575poundsperfarm.Thisprogramallowedthefarmtoincreasetheirincomesbyanaverageof276,908 per farm