DAIRY FARM VALUES.

New Zealand Herald, Volume LXV, Issue 20111, 23 November 1928, Page 16

DAIRY FARM VALUES.

Sir,—Your correspondent, " R.H.M.," outlines the view from the standpoint of one who "deals in dairy farm mortgages." Ho is a cautious man, and bases his 15-year-old plan, which ho says ho has alwayu found quite reliable, on the assumption that " the product of a cow on the average is £12." Working from this he concludes that "if tho land is good enough to carry a cow to tho acre it is worth £60," and so on. "I am certain." ho continues, " that if a dairy farmer works on these figures lie will be safe." I wonder. Tho man who would try to run a cow-per-acre farm with £l2 producing cows would need a lot of nerve. What most people are really interested in is not the market price of land, which is governed by many transient factors, or its value from a money-lender's or speculator's point of view, but its real economic value, based on actual production at average prices. Wo cannot get at this by guessing. Some years ago, when there was a pronounced tendency to take the extreme switig of tho pendulum from boom prices as a basis for readjustment of land values, I made an honest effort to arrive at a reasonable economic value for improved dairy farming lands. After careful analysis of a considerable number of actual returns I published, as " a protest and a formula," my conviction that for made dairy farms of good quality, properly equipped and favourably situated, "the value per acre in £ is equal to the carrying capacity per . 10") acres," namely, two cow per acre land is worth £SO, etc. In my letter of 16th inst. I give the detailed figures on which this formula is based. I suggest to " R.H.M." that they should not bo " difficult to understand by the ordinary person." They agree almost exactly with those of tho Government economist., Mr, Fawcett, who analysed over 200 actual returns, and have never been seriously questioned by any competent critic. On the other hand, a number of practical men confirm my conclusion. Among my latest correspondence is a letter from a prominent dairy farmer expressing the opinion that my " compact and accurate formula is worthy of wide, publication for the public benefit. Land should be valued at its productive value and that is where you hit the nail on the head." Extremely few of our dairy farms are producing anything like what they are capable of. There is no bettor investment in the world than the judicious advance of money to competent farmers to enable them to bring their farms to full carrying capacity, and their herds to full productivity I think I am within the mark in estimating that our exportable surplus of dairy produce could be doubled within a few years without touching an acre of the enormous area of virgin land still available. The task is too big for private enterprise, but should bo within the compass of wisely directed State policy. Incidentally, it would include the solution of the unemployment difficulty. This is the fascinating problem presenting itself. The statesman of large courage and wide vision who solves it. will leavo an indelible mark on our history. J. S. Browke. Hamilton, Nov. 22, 1928.