The Dominion MONDAY, DECEMBER 14, 1931. DANISH FARMING IN THE DEPRESSION

Dominion, Volume 25, Issue 68, 14 December 1931, Page 10

The Dominion MONDAY, DECEMBER 14, 1931. DANISH FARMING IN THE DEPRESSION

It will, doubtless, be little consolation to the average New Zealand farmer in his present troubles and difficulties to remind that the state of primary producers in every country in the world to- y is no better, and, indeed, in many cases, much worse than his own. The New Zealand farmer is frequently invited to regard his Danish rival as a model of perfection, by imitating, whom he may overcome many of his own difficulties, but the position of Denmark at the present is a very unhappy one, as is strikingly shown by The Economist During the first years after the War the Danish farmer abounded in prosperity, but the net return on agricultural land fell from 8 per. cent, in 1921 on the capital value to 1.8 per cent, in 1925,. The response was to increase production, tighten control and lower costs. This attempt to meet the crisis appeared, at first to be successful. The profit on agricultural capital rose again to 6-5 per cent, in 1928 and 5.8 per cent, in 1929. Britain, which m 1927 took 56 per cent, of Denmark’s exports, took 59 per cent, in 1930, and though the price of bacon, butter and eggs in England was steadily falling, an increase in the quantity exported went far to maintain the return in value. In 1929 more than £27 million was paid by Britain to Denmark for bacon, £2O million for butter, and nearly £4s million for eggs, and these represented 96 per cent, of the total sum of imports But in 1930 the fall in British prices continued and became sharper. Bacon lost 40 per cent, of its value; cereals, eggs and butter 20 to 30 per cent.; and though an increase of 25 per cent, in the quantity of bacon sent to England maintained the value at £27 million, an addition of 7 per cent, to the butter was insufficient, and Danish eggs also ' lost ground. The process has been repeated in 1931, thus affording a parallel to the case of New Zealand. . If the Danish farmer’s costs were proportionately reduced, it would seem that the sale of. ever greater quantities at an ever lower price might be indefinitely continued, and it is true that the maize and other cereals which he imports as feeding stuffs were 30 per cent, cheaper in 1930 than in the previous year, and have again fallen in 1931. Up to the time of Denmark’s departure from the gold standard 2| months ago, the farmer was finding it difficult to make his labour costs conform to the needs of competitive markets. Though .90 per cent, of the farms are owned by actual cultivators, two-thirds of them require additional labour outside their own families. Danish labour is no longer cheap; for whereas the retail cost of. living in 1930 stood at 159 (1913 equals 100), the corresponding figure for wages was 261. The average farmer holds 60 per cent, of his capital from a mortgage institution. The total of agricultural mortgage debt is double that of 1914, though ratable values have risen only 60 per -cent, and farm valuations are still inflated. Despite the lenient policy of the credit associations, the proportion of overdue loans is uncomfortably large. The Danish farmer is consequently now, for the first time, in a generation, in serious distress. His net weekly income, after allowing for family labour, but not for mortgage charges, was estimated at £3/10/- per acre in 1928, £3/3/- in 1929 and only £l. in 1930. It will be a minus quantity in 1931, and the payment of mortgage dues has in many cases become impossible. Farms meanwhile are fully stocked; there has been a huge increase in the number of pigs and poultry in the last two years, and the area of arable land is being steadily though slowly extended. In 1500 square miles Denmark has seven million acres under the plough; England and Wales in 51,000 square miles have 9,600,000. Reduction of outlay cannot be immediate, and the Dane’s only remedy appears to be a continuance of his existing policy, selling more goods at a lower price, and asking his creditors to be patient. To provide support for the distressed farmers during the crisis, the Government is raising over £2 million by a 25 per cent, increase in the income tax and additions to the beer and petrol taxes and the silk duty. If a British tariff provided for Imperial preference, the Dane’s rivals would gain on him, remarks The Economist; and under a quota regime he can hope for no British favours, since Britain’s exports to Denmark are not very great, amounting in 1930 to only £l4 million. The prospect is not bright, but the history of the last 50 years proves the resourcefulness and the organising power of the average Danish cultivator- The Folk High Schools are there to give him courage; the agricultural schools to provide science. He produces 48 bushels of wheat per acre and 727 gallons of milk per cow. There is a moral in this for. the New Zealand farmer.