FARM ACCOUNTING

Nelson Evening Mail, Volume LXXII, 8 November 1938, Page 3

FARM ACCOUNTING

A REVOLIUTONARY SUGGESTION A correspondent of the New Zealand "Accountants’ Journal” mentions that Mr R. O. Montgomerie, of Kakatahi, near Wanganui, has been endeavouring for three years to persuade the head office of the New Zealand Farmers’ Union to undertake the big task of acquiring statistics of the business of farming in the Dominion. He visions | the recording of the occupation of farming in profit-and-loss-and-balance-i sheet form so that one could say defin- ; itely that farming in New Zealand, afj ter making provision for all contingencies, during (say) the last five years i has produced an income of so much on ! the capital invested. The industry I would then be in a position, he claims, i of being able to make a specific case I for lessened tariffs or increased exchange. Mr Montgomerie also wishes to know the average cost of replacing soil fertility by fertiliser and other methods, of combating 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 compelled the dairying authorities to produce some very starching and carefully prepared costs in that branch of the industry. Mr Montgomerie would like to see this carried out in the sheep and agricultural branches of farming and the economies 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 office of the Farmers’ Union has not access to farmers’ books, it has been suggested that it have access, by some means, to their income-tax returns, or to a copy of them. Mr Montgomerie’s leading point is that some arbitrary, but readily calculable means o. assessing the depreciation of second-class land must be found, and it has been submitted in this con nection that land must be roughly classified and a rate of depreciation fixed in certain classes where depreciation takes place.

In a comment on the letter, the editor remarks: “The subject is of farreaching importance, not only to the | farming community, but to the Dominion generally, and it might be 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 might well form the basis for a thesis competition.

“There is one point in the letter, however. which we think could hardly be given effect to, and that is in respect to access to income-tax returns sent in by farmers. Apart from such returns being regarded as strictly confidential by the Department, we are afraid that this plan would be impracticable.”