LAND VALUE

Evening Post, Volume C, Issue 23, 27 July 1920, Page 10

LAND VALUE

A FARMER'S VIEWS

REMARKS BY SIR JAMES WILSON.

Some interesting remarks, from the farmers' point of view, on the subject of land values, are contained in the annual address of the President of the New Zealand Farmers' Union (Sir James Wilson). It was quite certain, said Sir James, that the paper value of land had increased very materially, and especially was this the case for land suitable for dairying. If the sovereign had fallen in value, was it not likely that more pound notes would have to be given for land, just the same as any other commodity? The cost of labour generally did not enter into the case, because the land had mostly been sold in such small areas that the owner would do the milking himself ; but it was evident that whatever the value of the sovereign the price paid for the land and the engagements entered into would remain the same when the purchasing power of the sovereign increased. "Let me give you an instance of, perhaps, the best 'bit of dairying land I know of—what the returns were last year and the effect upon the price of land," said Sir James. "It is, however, an exceptional case. The farm consists of 78 acres. Running on it are 53 cows of a high grade; the young stock, horses, etc., make up the numbers to about a beast to the acre, which speaks for the quality of the land. It is close to a cheese factory, and expenses are small. The owner of the land, has let it to a share-milker, whe gets two-fifths' of the milk return and the whole of the returns from pigs and calves, etc., except that he has to give the owner eight heifer calves per annum to make up for the discarded cows. The milk cheque came to £1500. The owner therefore gets £1000 and the eight heifers for his share. He has been offered and refused £185 per acre, because he argues that if he invested the money he would get for his farm it would not give him the same income. The price of butter-fat was in the region of 2s per lb, and the return per cow, therefore, to the owner about £20 a cow (that is including the value of the heifers).

"No one imagines, I should say, that after a few years, when the world has settled down again and the producing countries get back to normal, the price will remain at, that figure. The .normal price, judging by the past, is about Is: the above owner, therefore, will have his income cut down by a half. If he had sold his land at £185, someone would have had to bear the loss: for it is an axiom which sometimes takes time to prove, that the value of agricultural land is in the long run. based upon its production.

"It is useless,; therefore, to offer an opinion as to whether land is too high at the present moment, for what the level of prices will be no one can foretell."