Farm incomes fluctuate considerably from year to year, partly because of variations in the prices of inputs and outputs and partly due to changes in their volume. This article attempts to determine the effect of each of these factors by using chain indices to separate annual changes in the values of inputs and of outputs into quantity and price effects. Although 66 per cent of the increase in the volume of production can be attributed to technological advance, it has had only a minor impact on the level of farm income due to the depressing effect of increased output on product prices. Because of the reduction in the labour force as a consequence of technological change, farm income has to be shared among a diminishing number of persons. Family income per labour unit rose annually by 11 per cent. Of this, 49 per cent can be attributed to a reduction in the labour force, 40 per cent to price changes, and the remaining 11 per cent to the effect of technological advance on the volume of output and inputs other than family labour.