The purpose of this paper is to provide a theoretical foundation for explaining the rationality of allocating traditional "farm resources" to nonfarm employment. This is a first step towards including nonfarm employment of farm resources in micro and macro models of structural adjustment and production response to changes in economic stimuli. The theoretical model is developed around the use of operator's labor at the farm level. It demonstrates the conditions under which farm operators can combine farm and nonfarm employment to maximize income and explains, in a familiar theoretical context, the attractiveness of part-time farming as a permanent or as a transitory organization of resource use. AGRICULTURAL economists are becoming increasingly aware that f i more attention should be focused on nonfarm employment of what have traditionally been called "farm resources." In the last decade nonfarm employment has been a growing source of income to farm people. This paper shows, with the aid of diagrams, that the decision by a farm operator to allocate part of his resources (chiefly labor) to nonfarm employment may be both rational and consistent with the goals of maximizing family income and making efficient use of farm and family resources. The analysis is restricted to resource allocation at the farm level and deals primarily with farm labor, but the same principles apply to other resources.No model of part-time farming can reflect the total complex of forces which determine how each farm operator will use his resources. But a simple, logical model should serve as an effective base from which to probe the myriad of motivations behind a farm operator's decision about how much of his resources to allocate to nonfarm employment.A basic assumption leading to the model which follows is that farm enterprise alternatives are typically subject to diminishing physical and economic returns (nonfarm alternatives are not) within the usual ranges of experience. Other initial assumptions are that: (1) agriculture is an industry of perfect, atomistic competition so that the decisions of anyone operator do not have a perceptible influence on aggregate demand, supply and prices; (2) the farm under analysis starts with a given stock of capital, land, labor, and other resources; (3) farmers' indifference schedo I am indebted to Ronald

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The adoption of sustainable farming system practices by U.S. producers could affect the international competitive position of many agricultural commodities, including livestock. The adoption of such practices over the next several decades will depend on commodity policy legislation, environmental regulation, commodity price and acreage diversion incentives, and the success of ongoing GATT negotiations and trade liberalization. However, the extent and magnitude of these effects are dependent on the internalization and recognition of social costs of agricultural production by farmers and explicit tradeoffs between environmental degradation and agricultural profitability. Environmental externalities include soil loss, surface and ground water contamination by agricultural residuals, loss of wildlife habitat, and diminished aesthetic amenities. In effect, both public and private concerns about the marginal social environmental costs associated with production, when present, will influence the shape and location of commodity supply curves and the U.S. export capability. In turn, these supply curves, which define the production capacity of the U.S. to meet domestic and export demand, will determine our comparative competitive positions for different commodities in world markets.