A GRICULTURAL economists' interest in models of farm-firm growth arises from (1) the inadequacy of static firm theory to explain the observed differential rates of growth of different farms, and (2) the lack of confirmation of a U-shaped long-run cost curve in empirical studies of farm cost-size relationships [2, 3]. Growth, according to Penrose [6], is an internal process of the firm through which the productive opportunities of the firm are used to expand its size. For some enterprising firms, there is a continuous incentive to expand and there is no limit to their absolute size. However, it is hypothesized that there is a limit to the rate of growth, i.e., the productive opportunities of a firm are limited in any period. The intent of this paper is to present a simple model of capital accumulation and show how growth rates are an integral part of this process. The specific assumptions made in order to specify the model are quite plausible in view of empirical studies of farm firms; however, no attempt will be made to test the model (empirically) and hence no claims will be made for its theoretical significance. The only claim to be made is that the model is a useful way of looking at the accumulation process and that some of the hypotheses used in the model and/or deducible from the model may be testable.