FARM ACCOUNTS

Otago Daily Times, Issue 27080, 14 May 1949, Page 2

FARM ACCOUNTS

A VALUABLE BOOK Farm Accounts. By F. Sewell Bray and C. V. Dawe. Oxford University Press—Geoffrey Cumber lege, London. 15s (Engl.). .This book, written for the Incorporated Accountants’ Research Committee, is designed as a handy guide to the farmer who wishes to keep his own accounts. It is divided into four sections. In the first is set out, with | admirable clarity, apd in commend- , ably untechnical language, a simple 1 method of opening and keeping farm books. The second section explains L how this may be extended so that the farmer can become his own cost accountant. The third- deals with the relationship between the agricultural economist and the farmer; and the fourth with that between the professional accountant and the farmer. The appendices, which are also full and clear, give specimen books and forms. It can be said, for a start, that a first reading of the book would probably frighten most farmers away from book-Keeping altogether. A second reading would probably make them realise that book-keeping is not really as difficult as it looks. Any man. however unused to accounts, could from this book learn all that is necessary to do the work adequately, without overstraining himself, and without an undue expenditure of time. The book is, however, written specifically for the English farmer, and since the depreciation rates and general tax information are different from New Zealand data, it cannot be recommended to New Zealand farmers as a handbook for general purposes. Even so, it would prove a valuable book to any farm accountant, and a New Zealand edition rewritten for this market would be a most useful production. It is clear from the text that England is doing far more for her farmers in the way of research into agricultural economics than is being done here. It is true that agriculture there is quantitatively more important. It may be a revelation to many that England and Wales have 277,000 independent farmers, and a further half million agricultural employees, whild the annual value of agricultural produce is in the neighbourhood of £500,000,000. These figures make our own look small. In New Zealand, agriculture is relatively far more important than in England, and for this reason much of what Messrs Bray and Dawe say could well be marked, learned and inwardly digested by our Minister of Agriculture and his staff. Many of the tax provisions in England seem far more enlightened than our own. A farmer is allowed to write off 'new capital expenditure in 10 years by equal 10 per cent, instalments. This is a wise provision and one that, introduced here, would allow many farmers to do what they cannot hope to do to-day, out of the meagre savings left them when taxation has taken its toll. The authors make, too, one very pregnant observation. They point out that in times of rising prices farmers must be allowed to make substantial profits if they are to maintain their farms in proper condition, since their new expenditure must exceed the reserves which have been built up by writing off expendi-tux-e made at lower prices. In New Zealand to-day no farmer can make substantial profits when the State takes up to seventeen-twentieths of his earnings. To the professional farm accountant, the second on farm cost accounting will be of th< greatest interest. This is an aspect which is almost unstudied here. Far too much emphasis is placed on accounting for taxation purposes, and while this is essential, cost accounting can be of even greater value to the farmer. In England studies are made of relative costs of production in related groups of farms. From this it is easy to detect the farmer who is doing all or a part of his job uneconomically, with the result that it is not hard to find where he is going wrong and correct the error. A man may make a good total profit because he is above average in one department, and actually be losing money in another. Here is an almost untapped field. Education would be needed, and co-operation, but both can be achieved if the right body takes the matter up. and if in the result the economic position of farmers as a whole can be strengthened then the whole country will benefit. “Farm Accounts” can be recommended as mandatory reading for stock agents, farm accountants and members of Parliament. P. 11. W. N.