A central concern of agricultural policy in the EU, the UK and virtually all industrialised countries, is the living standard of farmers and their families. This chapter explores what is meant by "standard of living" in the context of agricultural policy. The economic welfare of farmers and their families, as indicated by their standard of living, is determined by their level of consumption of goods and services. For practical purposes many countries utilise a poverty line in their welfare policies, though it may not be labelled bluntly as such. Its practical implementation may involve measuring the cost of some single parameter, such as the necessary family expenditure on food, and extrapolating from this to the total income requirement to cover all purposes at the poverty level. Pluriactivity among farm households implies that some discretion can be exerted in the allocation of resources between competing on-farm and off-farm uses.