FARM ACCOUNTING.

Press, Volume LXVI, Issue 19863, 26 February 1930, Page 14

FARM ACCOUNTING.

ITS NECESSITY STRESSED. (Contributed.) It is now recognised that farming has to be regarded in the light of a business, and that it is necessary in order to obtain the best results that the farm should be run on business lines. A correct record of the transactions will materially assist the farmer or pastoralist to obtain successful results from his operations. On account of the increased cost of production and the present high taxation (Government and local), it is essential for the man on the land to know just what it costs him to produce, whether it be in sheep, cattle, crops, dairy produce, or other products. This information cannot be obtained from estimates only; it can, however, bo accurately furnished by the adoption of a simple form of bookkeeping. As the present price of wool is in many cases below the cost of production, it is of vital importance to the sheepfarmer to know the cost of grow. ing wool. Likewise, in these days of machinery, the agriculturist should be in a position to know the cost of working tractors as against teams or the newer types of farm machinery as compared with the older modeb. In this connexion, the actual cost of growing wheat can only be ascertained by dissectional costs covering numerous headings, such ns rent or interest on cost of land, ploughing, discing, harrowing, drilling, rolling, seed, manure, twine, cutting and stooking, sacks, threshing, and cartage. The above items do not include expenses such as repairs and renewals to plant and replacement of horses. Further, when purchases of rural properties are contemplated, buyers will want to know the yearly profits instead of being satisfied with general information as to the carrying capacity, yield per acre, etc., as has hitherto obtained. As a rule woolgrowers are more concerned with the price realised than] with the cost of Deduction. Mr F. >S. Bowen, a prominent Gisborne runholder, in an address to the Farmers' Union some time ago, gave helpful information on this subject, and incidentally pointed out that he estimated that it cost 14d and "upwards to grow wool, and that an increase of Id per lb represented about £850,000 to the growers. His method of assessment of cost was as follows: 1. Government value of land at six per cent. 2 Intorost at 6$ per cent, on (sheep at los a head, and cattle at £3 10s a head). 3. All rates and taxes, local and Government. 4. TTnboep on buildings, fences, yards, dins, etc. 5. Insurances on buildings and labour. 6. Purchases of rams and bulls annually. 7. Labour, carting, shearing, wool bines, and dipping. 8. Owner's salary for management. 9. Annual loss on sheep and cattle, three per cent. (say). Deduct proceeds of returns of meat and store stock sold from the farm or any other produce, and balance represents cost of growing wool. Mr Bowen stated that the mortgage on the land has nothing to do with the cost +i? r ii th " price " the owner paid for the land. Some uniform value must be placed on it. and the Government valuation, he added, was the only safe guide. • J

There may be some question on this argument, but in these days of fluctua-

ting markets producers will find ' in correct book-keeping methods something they cannot afford to ignore.