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<br />C\J <br />o <br />CO - 26 - <br /> <br />of operation. Variations on the cow calf operation and other types of operations <br /> <br />and enterprises, have also been bud!,eted and it .lill be shown subsequently that <br /> <br />some of the variations produced more favorable results. Some possible enterprises, <br /> <br />particularly a farm-flock sheep enterprise which may show more favorable results, <br /> <br />have not been budreted in this report. <br /> <br />Parity 11age for Operator.--In analysis of reclamation projects, the Bureau of Recla- <br /> <br />mation has customarily had an "allol-Jance for family living". This allowance has <br /> <br />varied with different projects and studies, but frequently has been a fairly small <br /> <br />figure. Robert H. ~lasucci recently defined a concept of "income parity.".!! <br /> <br />rlasucci I S concept of an income-parity standard for arricul ture \~ould permit compen- <br /> <br />sation for the use of total capital at 5 percent, and compensation for labor at <br /> <br />$1.25 for hired labor and $2.32 per hour for operator and family labor. The wage <br /> <br />allowed for operator and family labor of $2.32 is the average wage for a factory <br /> <br />worker in the United States in 1962. "Parity wage" on 3,000 hours of operator's <br /> <br />labor "ould be $6,960. Reference to Table 3 indicates that not one of the four <br /> <br />case-study ranches obtained a "parity wage" in 1962. They still would not obtain a <br /> <br />"parity wage" in the normalized situation, nor in the situation with supplemental <br /> <br />water only. Ranches II and IV would approach or exceed "parity wage" earninl's in <br /> <br />the situation with additional land and supplep;ental water. Operator and family <br /> <br />labor accounted for about 1 1/2 man-equivalents on Ranch IV, and for somewhat more <br /> <br />than one man-equivalent on Ranch II. <br /> <br />Failure to earn a "parity wage" on the case-study ranches does not represent a <br /> <br />really serious consequence on those ranches. As previously indicated, the indebted- <br /> <br />ness on those ranches is low. The charge for interest on investment, which is <br /> <br />deducted from Net Ranch Income, is for the most part a return to operator's capital. <br /> <br />i <br />! <br /> <br />.!! ~lasucci, Robert H., "Income Parity Standards for Agriculture," Agricultural <br />Economics Research, October 1962, U. S. Dept. of Agriculture, Washington, D. C. <br />