| Summary: | This study was based on data obtained from twenty-eight members of the Carman District Farm Business Association. These farms have consecutively kept farm records from 1957 to 1967. This data provided the basis for the study on the growth process of the family farm. There has been relatively little research into the detailed aspects of the growth process itself. Such information is necessary in order to not only better understand the nature of this process, but, also to enable recommendations for farm growth to be more reliably made. Another reason for the need for more research on farm growth is the existence of the "biological cycle" a problem unique to agriculture. It was the objective of the study to quantify the internal determinants of farm growth in order to aid decision making by farmers and policy makers in their efforts to increase net income. An econometric model was constructed for evaluating the factors that influence production, household consumption and capital investment. A two- and three-factor production function expressed in the Solow's model was used to analyze technological change. The production, consumption and investment functions were quantified by using ordinary least squares regression analysis. The parameters of regression coefficients indicated the influence that the specific factors had on farm growth... In general, the analysis revealed that as the farm unit expands in size net income also increases. Therefore, the farm family must make wise decisions in allocating the income between household and business. The rate of growth in equity was influenced by the rate of return on capital, the interest rate on borrowed capital, income tax, household consumption and debt leverage or the debt to equity ratio.
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