RURAL ECONOMICS.

New Zealand Herald, Volume LXIV, Issue 19720, 20 August 1927, Page 14

RURAL ECONOMICS.

Sir, —I wish to thank you for your excellent report of my lecture before the Auckland Chamber of Commerce on Thursday, and for your editorial comment. 1 1 agree, of course, with your general point that, for an accurate estimate of the present economic position of the farmer, export prices should be corrected to allow for increased productivity. It should also be corrected for changes in cost of processing, marketing, transport, etc., during the period. These points were, in fact, touched upon, but not elaborated in my lecture. In preparation for my address, I spent two or three weeks, assisted by one of my students. in attempting to provide a basis on which export figures were corrected for the. productivity factor. But while the work of our statistical office is excellent and compares very favourably with similar departments in other countries, there were so many statistical "snags" to be overcome before such a correction could be made, that I decided that the introduction of this factor might, in fact, be more misleading than helpful. Not only would the volume of exports have to be corrected for variations in the volume of home-consumed products, acreage, number of farmers, and so on, but also indices of costs would have to be corrected for increased capital outlay, increased use of machinery, other requisites, labour and so on. My intention is not to refute your criticism, which is perfectly legitimate, but to indicate that the point was not overlooked. To deal with it fully would have necessitated more time and labour from my professorial duties than" was possible, and in any case it could not have been fully covered in the period available for my address. I may add also that I at-' tempted to obtain a "line" on the problem by obtaining the use of balancesheets of farmers in the hands of a prominent farmers' union official. For some reason he did not extend me the courtesy of a reply. The problem is, however, worthy of separate inquiry. My main point was to bring out the relative importance of the various factors to which depression is attributed. ' I am pleased to note that you agree with my main findings in this respect. I agree entirely with your opinion that many farmers are meeting their difficulties by improved methods. This is, indeed the most hopeful sign for the future, and however pessimistic my remarks may have appeared. I have abundant faith in the future of New Zealand's primary industries when once the disparity between land values and gross income is rectified. H. Bflshaw, Professor of Economics. A.U.C.