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<br />C\'j <br />o <br />00 <br /> <br />- 27 - <br /> <br />The operators of the case-study ranches then have a relatively small demand on Net <br /> <br />Ranch Income for interest on indebtedness, and can use the balance of this figure <br /> <br />for retirement of the small indebtedness, for family living, for improvement or <br /> <br />expansion of their operation., or for-any other uses. <br /> <br />In considering new farm units on a reclamation project, however, one should <br /> <br />keep in mind that a substantial investment is involved. Average investment on the <br /> <br />ISO-cow unit amounts to almost $94,000. If the initial costs for buildings and <br />improvements are considered, an investment on the order of $118,000 has been re- <br /> <br />quired. A settler is likely to start with a small amount of owned capital and <br /> <br />special financing arrangements. Host of the interest on investment would actually <br /> <br />be required to pay interest on the debt, and relatively little would be a return <br /> <br />to the operator for his own capital. Funds for retirement of the debt must come <br /> <br />from interest on owned capital, and from return to operator's labor. If the oper- <br /> <br />ator is to have any prospect of retiring the debt durinr his own life time, and also <br /> <br />to maintain a good standard of living and provide for education of his children, <br /> <br />then a fairly large return to operator and family labor will be necessary. There- <br /> <br />fore, it is felt that the "parity wage" as defined for the operator plus interest <br /> <br />on investment are not overly large to provide for service of the debt, retirement <br /> <br />of debt, and to allow the operator to make good economic and social progress. <br /> <br />As can be seen from Table 4, the first budget constructed for the new farm <br /> <br />units with beef-breeding cows on pasture fell far short of a return which would <br /> <br />allow for successful operation of the project. At the yield and productivity <br /> <br />levels indicated, there is probably no size of unit which would be successful with <br /> <br />beef cows on irrigated pasture. <br /> <br />Effect of Varying Productivity and Efficiency.--Since the 200-cow size did not give <br /> <br />a satisfactory return at the moderate level of productivity and efficiency, the <br /> <br />effects of varying productivity or efficiency were tested. The high level of <br />