RURAL ECONOMICS.

New Zealand Herald, Volume LXIV, Issue 19719, 19 August 1927, Page 10

RURAL ECONOMICS.

An instructive examination of the economic situation of New Zealand farming has been presented by Professor Belshaw. With his chief conclusion that inflation of land values has been, and remains, the principal handicap upon rural prosperity, few will now venture to disagree. No fact is written plainer in the Dominion's history than that, and the gravity of the blunders which caused it is emphasised by the painful struggle to escape the burden which artificial prices and the consequently excessive capital charges have laid upon primary producers. Within the limitations which inevitably confine any such inquiry, Professor Belshaw has probably given the best available estimate of the average situation of individual farmers. But the conclusions he presents do not accurately portray the condition of rural industry as a whole, because no account has been taken of the increase in production during the period. That has been too large to be neglected. An indication of its extent may be obtained from the measurement of exports at 1900 values, thus disposing of the variation in prices. On that basis the average annual volume of exports, expressed in sterling, in periods of four years, has been as follows: — Value at 1900 rates. 1911-14 , . . £17,800,231 1915-18 16,687,653 1919-22 ... . . 23,399,614 1923-26 t . 23,889,568 Thus, it appears that while the costs of production, and especially of capital, have risen, there has been a substantially larger volume of production to carry them. Land that did not change hands during 1915-2-1, estimated by Professor Belshaw at more than half the total area, has therefore the advantage of increased production as well as substantially higher prices, so that those who cultivate it may have a wider margin of income than before the war. Nor can it be doubted that land acquired at inflated values has contributed to the additional production. Nothing like half the area occupied has been abandoned, and farmers who have determined to overcome their difficulties have been assisted to meet the apparent deficiency in relative produce values by the improvement in methods that has been achieved in the post-war period. Any examination of their situation would be misleading unless the indices of prices were modified by the increase in production. «