The problem of allocating farm income among the factors of production has long received the attention of agricultural economists. Progress toward a satisfactory solution has been impeded, both by difficult conceptual problems and by lack of adequate statistical data. In the following article, Mr. Hurd makes a new ef fort in the field of farm income allocation on the basis of a considerably better-than-average body of data, and a new conceptual approach. It is not expected that all readers will concur fully with his analysis. Problems are certain to be raised with respect to such questions as whether the value of inventory changes should be included in net farm income for allocation purposes; the inclusion of capital outlays in expenses deductible from gross income; and combining the return to labor and management. However, this paper does offer an approach to the problem that is both interesting and stimulating, and has the particular virtue of avoiding the unsatisfactory method of always treating the returns to one of the factors as a residual item.