FARM ACCOUNTING.

Auckland Star, Volume LXIX, Issue 280, 26 November 1938, Page 15

FARM ACCOUNTING.

NEW ZEALAND STATISTICS. R EVOLUTIONARY 8 U<; (J F.ST TON". A correspondent of the Xew Zealand "Accountants' .Journal"' mention* that Mr. R. 0. Montgomerie, of Kakatahi. near Wanganui, has l>een endeavouring for three years to persuade the head office of the Xew Zealand Farmers' I'nion to undertake the big task of acquiring statistics of the business of farming in the Dominion. He vision* tlx l recording of the occupation of farming in profit and loss anil balance-sheet form so that one eotild say definitely that farming in New Zealand, after making provision for all contingencies, during (sav) the last live years lias produced an income of so much on the capital invested. The industry would then be in a position, lie claims, of being able to make a specific case for lessened tariffs or increased exchange. Mr. Montgomerie also wishes to know the average eost of replacing soil fertility by fertiliser and other methods, of combat-

ing noxious -weeds, rabbit nuisance and disease loss among stock, together with such matters as. capital requirements per head of sheep, etc.

The advent of the guaranteed price has eompeUed the dairying authorities to produce some very searching and caiefullv prepared costs in that branch of the industry. Mr. Montgomerie would like to see this carried out in the sheep ami agricultural branches of farming and the economics of the whole industry carried a step further.

A suggested step in this direction would be the keeping of proper books of account by all farmers. As the head i itliee ot the Farmers* I'nion has not access to farmers' books, it has been suggested that it have acce»s, by some means, to their income tax returns, or to a copy of them.

Mr. Mont gomerie's leading point is that some arbitrary but readily calculable means of assessing the depreciation ot" second-class land must l>e found, and it has been submitted in this connection that land must be roughly• classi tied and a, rate of depreciation fixed in certain classes where depreciation takes place.

In a. comment on the letter, the editor remarks: " I he subject is of far-reaching importance, not only to the farming

community but to the Dominion generally, and it might he advantageous to have a thorough investigation made by some leading accountants, who could no doubt evolve a system which would be of practical value to men on the land. The subject mijjht well form the basis for a thesis competition.

"There is one point in tlie letter, however, wliieli we think ei>nhl hardly lie fjivcn effect to. and that is ill respcct to access to income tax return* <-cnl in liy farmers. Apart from mieh returns rci>ar(le<l as ntrietly <-«>?iti«!«■ 111 ial hv the Depart ment. we are afraid that this plan would be impractii-alde.''