nd.

The question whether it would be profitable to cultivate any piece of
land, turns upon whether the receipts which would be obtained by
selling the produce would exceed the costs of cultivation: and under
these costs of cultivation we must include, of course, the
remuneration of the farmer's services. Farmers, like other people,
have to live; and they would not take on the troublesome job of
farming, unless there seemed a prospect of making a living out of
it. The remuneration of the farmer takes, of course, the form not of a
salary, but of profits: and these profits vary very much from year to
year, and from place to place, and from man to man. But they are
essentially payment for work done, and an ordinary profit must be
regarded therefore as part of the necessary costs of farming. Thus it
will not be worth while to cultivate a piece of land, and the land
will in fact lie unused, upon which a careful farmer might obtain a
profit in the ordinary sense, of no more than $50 or $100 a year. The
marginal land will be land which yields a decent profit to a decent
farmer, as well as a gross rent to the landowner, sufficient to
compensate him for his capital outlay, but nothing further.

What, then, will be the rent of a fertile and well-situated farm,
about which there is no doubt that it is well worth cultivating? Part
of the gross rent which the landowner receives must again be regarded
as merely a return for the capital expended in equipping the farm for
use; but in this case, there will be a residue left over, which
constitutes the net rent of the land. The net rent will measure the
derived utility of the land to its occupier, and will in general
represent (very roughly, of course, in practice) the differential
advantage of cultivating the land in question rather than land on the
"margin of cultivation." This differential advantage may take either,
or both, of the forms, of a larger produce per acre, or a lower cost
of production and marketing. But, in any case, the extra profit,
which, if no rent were charged, a decent farmer could obtain by
cultivating the farm in question, rather than a marginal farm, will be
roughly equal to the net rent which his landlord can exact from him,
if his landlord so chooses. The landlord may, of course, not choose to
exact a rent as high as this; and as a matter of fact, in a country
like Great Britain landlords often content themselves with less. The
traditions associated with the