CONTRIBUTING CAUSES.

Otago Daily Times, Issue 20060, 29 March 1927, Page 4

CONTRIBUTING CAUSES.

COSTS OF PRODUCTION. COMPARING OTHER INDUSTRIES. If a hundred farmers, selected at random were asked to name the chief reason for the present, agricultural depression, the reply in at least 95 per cent of eases w'ouhl be; “Low prices." It is doubtful if a single one cf Hint number would ansuer. what is equally I rue: “High costs of production.” However, to those who have the future welfare of our agricultural industry at, heart (his is of psychological rather tliaii of material interest. The only distinction is that, in one case Hie burden ot responsibility is attached to circumstances outside Hie 'control of the farmer, while in the oilier it recoil-, to some extent, upon hi- own shoulders. The term low prices is a relative one and signifies (hat the amount received by Hu; farmer for hi- produce is insufficient to cover the ro-ts of production plus a fair maigin of profit. In other words, in spile of his nearness to the homo market and of tho accrued advantages derived from agricultural research and from improved stock and from bettor methods of cultivation, (ho British farmer cannot compote on equal terms with forciiru produce. In short. Ids costs of production are too high. Now tho truth mu-t, bo faced at once that it is lound this question of costs ot production that the battle of British agriculture is going to be waged for some vein's to come. Tlio problem of the last century was how to intensify Hie production of the soil to feed a. rapidly growing population. The solution was found in a combination of various expedients, the chief of which may he briefly enumerated as (1| the inflow of capital from Hie affluent iniiiinfiieturirig el.is-e-; (2) the improved methods of cultivation employed by the, larger and belter capitalised farmers; (3l tbi enclosure of Hie common-: and (4) the breeding of. better stock. The transition was accompanied. a- all such agricultural transit inns n-unllv are, by much wretchedness and misery amongst the bmorniit and irnpoveri-hcil small holder; of land. The feature of this so-called Agrarian lievoliit ion whu h lias been so frequently overlooked was the vital part that, win played by capital in the rehabilitation of the farming industry. In this re.-pect it, cannot be too strongly emphasised that, agriculture, in eeiniiion with other industries. is always in a state of transition and progress, and that from time lo time tho methods of management employed must bo overhauled and capital expenditure incurred to bring' them up to date. Whether this is done over a period of year? (as would most likely hat,pen In the ea-e of progressive farmers), or delayed until the fanning methods have become antiquated, will, in nil probability, determine the success Or failure of the enterprise. A parallel instance iikiv lie di-eerned in the great rnanufactiin' industries, where, every few years, machinery and nppiianeehav’o to he condemned and seranperl. not because they are worn out. hut because ibev are antiquated and have been superseded by more efficient plant calculated to give a higher output at a reduced cost.

Provision has to bo made for tho expenditure thereby entailed by placing a certain proportion of the annual profits to a reserve fund. Palling adequate funds of their own the companies concerned cither raise a loan through the banks or offer shares for public subscription. It is probably due to the greater readiness displayed by the United Stales of America m discarding obsolete plant which accounts for the prosperity of her manufacturing industries. 'the substitution of modern for old machinery is one of the first and most important .means of reducing tho costs of production. Another is to expand tho business so that by creating a larger output the same object of reduced costs may bo achieved. In this design wo got the nucleus of mass production. Xow the farming industry differs very widely from the mamifncturiiur industries in that it is comprised rot of a concentrated unit under one management. but of many thousands of independent units scattered over tho length and breadth of the land. Each has its own system of management, anil each is dependent upon the capacities of one man for its success or failure. There is no link of co-opera-tion either for marketing, for controlling procedure, for capitalisation, or for bringing all units up to a uniform standard of efficiency. Without access to capital, other than that accumulated by good for; tune after many years of labour, many of the farmers carry on with such obsolete equipment, or are so badly understocked, that they arc sooner or late reduced to a state of insolvency and their farms to one of complete or partial dilapidation. Not least of the many circumstances contributing to this deplorable condition is the necessity imposed upon each individual fanner of attending markets in person. 'l’lie nnneecsary wastefulness of fanners attending a market at least once a week, each to transact his own, and often trivial, affairs, is a staggering thought. From the point of view of political economy this waste of time and labour is a debit in the fanning balance sheet and materially enhances costs of production. From the foregoing train of thought tho conclusion is drawn that in all too many instances farmers do not possess sufficient capital to purchase either tho necessary stock, machinery, implements-, or manures, etc., to run their holdings on tho most modern and economic lines. Therefore, in order to bo. sustained in tlieir costly, antiquated, and uneconomic methods they must receive a high price for tlieir produce. Failing high prices, tiie costs of production exceed tho sum realised for their produce, and when this unsatisfactory state of affairs applies to a preponderating body of farmers there is a so-called depression in fanning. The reference to a predominating body of farmers naturally leads to a consideration of those not included in that term. It is first necessary to mention, however, that no attempt will be made here to aeisgn reasons for all tho vicissitudes of fortune that mark the careers of individual fanners. The subject is of so involved a nature, and covers nidi a wide range of personal and other issues, that several volumes would hardly suffice, even if tho competence were assured, to deal with its many-sided aspects. The matter has been thoroughly probed at different times by Royal Commissions and self-ap-pointed investigation committees, and their evidence and conclusions arc available for the perusal of those who arc interested. Of tho valuable information collected by these official and other bodies, it is necessary to remark that it often fails to give sufficient prominence to the personal element. Initiative, enterprise, intelligence and industry _ arc a rare combination of human qualities to find in one and the same person at any time; it, is even more rare to find them in company with a sound education and adequate means. But such combinations do exist and are largely accountable for many of the outsatnding sncce«dr9 in British farming, especially when qualified for a rough and tumble world by what Ifazlitt describes as: “. . . . a genius for business, an extraordinary capacity for affairs, quickness and comprehension united, an insight into character, an acquaintance with a number of particular ciVumstances, a variety of expedients and that for finding out what will do.” TEACHING THE YOUNG IDEA.