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I" r "....- jJ~ z. Reclamation Instructions Part 11 (, Economic In\'e!->ti!-:J(ion~ Series 110 Planning II b.5.2A!3l CHAPTER 5 COST SHARING Ic) Income Objective. Different types of farms represent different ways of aHaming the level of income necessary to comply with the family farm concept. An acceptable farm budget will therefore include returns to labor, man.lgement. and owner's capital which. in IOta I, are su((jcient for adequate support of the farm fami/y. The adequacy of disposable income, in cash and in value of farm products consumed in the home, shall be judged with refer. ence 10 the income level of farm family median income in the general area. The average national farm family median income for the preceding 3 years of record may also be used as a guide in determining an adequate level of fam- ilv disposable income. Annual national farm family median income data are provided in USDA's Agricultural Statistics. Annual estimates of average net farm income per farm by st.ate are provided in Economic Research Service, USDA, State Farm Income Statistics, Statistical Bulletin No. 557. Data from these sources should be supplemented with other information such as primary source data and judgment in determining the appropriate farm family income objective for each project situation. Idl Size of Farm. In water char8e rate review studies for irrigation districts pres- ently receiving water from a Federal reclamation project, the iarm size in payment capacity budgets should be the same as the model size of farm operatIon (not land ownership) in the district. In payment capacity studies for proposed projects. the estimated model size of farm operation under future project conditions at the end of the develop- ment period should be used in the budgets except for the following minimum constraint. On proposed projects, the minimum size of farm for payment capacily budgets should be a commercial farm providing reasonably fuH.time employment to the farm operator and an adequate return to his labor, man- agement, and equity. In case of high value specialty crops, the farm may not provide full employment, bur it should be large enough to provide a level of income equal to the national average income per farm operator family in the United States. 13) Methods of Bud~eting. Budgets are prepared to represent farm operations with and wlthoUl the project in order to provide assurance that the resulting payment capacity is 3tttributable to project water and project works rather than to other causes. For newlv irrigated land, payment capacity is usuallv expressed as dollars per acre, but in some cases for new land and usually for supplemental water supplv, it is expressed in terms of dollars per acre.foot of project water. Budgeting is a sampling procedure where the organization and operation of representative farms are system- alically outlined and the results extended by appropriate weighting to cover the entire study area. 11&-4 - 1112182 (Supersede. IOflSI801 J