Sue structureThe changing farm size-structure of British agriculture has been analysed in several studies, showing that there has been a continuing reduction in the number * The assistance of Mr. A. C. Jeffery, of Wye College, in the preparation of this table is gratefully acknowledged.

The practical significance of the conventional “net farm income” is elusive. It would be useful to have an accepted method of dividing “management and investment income” into its recognised Components—managerial salary and return on tenant's capital. One is a residual if the other can be calculated, and both alternatives are considered. An empirical formula is suggested for estimating the managerial salary which may be imputed to the farmer, taking account of his total turnover, his labour bill and his net farm income. This formula is then applied to Farm Management Survey data, for individual farms and for groups of average, high and low performance (output per £ input). The method may permit closer analysis of relative profitability.

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