FALLACIES

Press, Volume LXVII, Issue 20274, 27 June 1931, Page 16

FALLACIES

XLV.—THAT THE FARMER IS NOT, A BUSINESS MAN.

(SPECIAXLT waiTTKT JOB THE MESS.) [By Dr. I. W "Westok, Farm Economist, Canterbury Agricultural College.] •

In these times of lower price levels it is often stated that the present difficult financial position in ■which some farmers find themselves, at the moment is due to bad business management. But many young men, returned soldiers, and many sons of farmers, who desired to begin farming during or since the war period had practically no option in the matter. If they purchased land it is almost certain that the price paid, however well bought the land might be at the time, is too high at to-day's productive values. If they refused to buy land wen as farmers they missed ten to fifteen years of the best period of their lives. The accompanying statement of wool prices, which slightly accents but is quite typical of dairy and fat lamb prices also, shows the position very clearly. (Incidentally it shows also the very great likelihood of a swing back in wool Values to better prices in the immediate future, even though the long term trend may be downward.) Course of crossbred wool prices, per lb, 1870-1980: Falling Prices. Rising Prices. Palling Prices. Year. Price. Year. Price. Year. Pn<*. per lb. per lb. per ,?j 1573 ..'lsSid 1901 1024 Is 6Jd to to to 1901 .. 4 id 1324 Is 6Jd 1930 4£d [A graphical presentation of these ▼ariations will bo r found oil our Farm Pase. Xid. Thz Pbess/I jft. study of this statement indicates why fanners, quite apart from considerations of individual business ability, were confronted with difficult times in the generation prior to 1900, relatively easy times in the generation 1900 to 1925, and difficult times, again for those beginning farming during or since the war period. Apparently owing to long term price swings, there tends to be alternate generations of profitable and unprofitable farming periods. Those beginning farming from 1900 onwards put their success down to good business ability, and cannot' understand why their sons have not the same business ability. The truth is that even though the son may have trouble in meeting liabilities at the present time, yet he may still be a better worker, more skilled farmer, and better business man than his father. There are, however, still further'imDrovemente in business management that can be effected and one very large improvement that is 'possible is the keeping of accounts. The fanner commonly assumes that the keeping of farm accounts is ,not necessary, will occupy too much of his time, and in any case will be too difficult for hisa to manage. But with regard to each

of these objections further fallacies are involved. Accounts are necessary, Wq Vf|f •_ • with the drastic fall in prices that has occurred it is necessary 'f or most farmers to make just as drastic a reduction in costs in order to bring expenditure within income, and a review of the past season's income ani ! expenditure, necessitating account keeping, is the best means of show- ■ ing a farmer how such a reduction in costs can be effected. Moreover, those farmers who find them- " selves over-capitalised at the moment can best meet the position by setting out clearly to their mortgage details of income and expenditure far '■ the past season and by compiling an estimate of next season's income and expenditure. In the great -majority of cases such statements on examinatio& will show that neither bad management nor private extravagance, but reduced farm income only, has been the causa J of the present adverse position. Em to farmers not over-capitalised an annual review and stocktaking is just' - as necessary as in any other business. 1 • Accounts do not necessarily occupy much time. Provided a simple methtid _ is adopted and systematically adhered' 1 to, the time occupied need be only oft' hour per month or under two .or thre#" hours each second or third month. Accounts need not be difficult. a simple method can be used; or,'h& ; ' ter still, since most farmers, ont WfehJfe. ing all day, are often tired by evoN' ing and in any case not used to ueoni. work, the farmer can make use,'.la other business men do, of aceountufofv services for this work. ", _ Most fanners will at once JBJ& that this is . too expensive, here again a further involved. Provided, account? > j-. systematically filed by Ihe banner/groups of farmers making use V services of one accountant their accounts compiled qt a rate per farmer, and a rata warrant the slight cost the advantage of having a record of the year's usefulness of the accounts ing management. % * *5 As a business man.. - engaged in one of the tuating and exacting of nesses, the farmer requires; jji the facilities available to other men should be available & the same time the ties must be brbiigbf farmer's purchasing of co-operative inig and stringent J3 on the farmer's pw£'^r' t '""' , > ** T,^||l|r