NOTES ON RURAL TOPICS.

Otago Witness, Issue 3831, 16 August 1927, Page 12

NOTES ON RURAL TOPICS.

Separate Wool Rosters.

The suggestion offered by the Otago ■Farmers’ Union for

separating the North and South Islands for wool selling do not appeal to

wool brokers, who can see many difficulties without any compensating advantage. Separating the two rosters will not cause a spread of the selling season—that is, the clip will still be marketed from the period November to March inclusive. There is bound to be , clashing of sales unless there happens to be two separate sets of buyers, and, a northern exchange declares, it is difficult to see how this is to be arranged. If there is a split in the buying strength the market will weaken. It is advantageous to have the full buying strength concentrated in the one sale room, for that makes for competition. The ideal would be to centralise the sales in as few centres as possible, as is the ease in Australia, but that is rendered impossible here through local provincial interests. It would be an advantage to extend the selling season another month, but all efforts in that direction have so far proved futile. In the few years that the Wool Committee has been in existence full consideration has been given to effecting improvements, and yet all efforts to hold sales at Gisborne, and to increase the number of sales at Auckland, Invercargill, and Tiniavu have failed. It is well to remember that changes in the system of wool selling cannot he effected without the co-operation of the woo] buyers. They constitute the important factor in the wool market.

F. 0.8. Sales.

It is stated by a Melbourne paper that for some time efforts

have been made by a section of the dairying . industry in the Common-

wealth to have measures adopted to stop the sale of butter to Great Britain, or a free-on=sboard and a cost-insuranee-freight basis. This formed one of the principal

subjects to be discussed at the meeting of the Dairy Produce Control Board in Sydney recently. The objection to the sale of butter on these terms appears to be due to the belief that they operate against the dairy farmer in Australia, and opponents of the system claim that higher prices would be obtained in London if the whole of the export trade in butter to the United Kingdom were conducted solely on the consignment plan. it is stated that the London agency of the Australian Daily Control Board has been voicing opinions on the matter which are opposed to those held by the board. It has been said that f.o.b. sales provide an opportunity for the buyers to “ bear ” the market, and so bring down the price of the supplies sent to London on consignment. In view of the percentage of purchases, it is doubtful whether the buyers' do this, even if they wished to do so, for buyers do not generally purchase goods to make a loss, but to make a protit. Hence f.o.b. buyers are an immediate support to the market, as their object is to help prices upwards so that their profits will be larger. Sellers of butter in Australia and New Zealand on f.o.b. or e.i.f. terms deal in that way of their own free will They recognise the value of a prompt cash deal, which relieves them of all anxiety as to market tendencies. The consignment trade is solely speculative.

What Control Costs.

Speaking to the toast of “Agiicultur.il, Pastoral, and Dairying

Interests ” at the annual reunion of the Winton A. and P. Association,

Mr W. A. Saunders (says an exchange.) quoted some figures taken from an address delivered by the chairman of the Dairy Control Board, wherein the latter gentieman made public some of the items due to appear on the board’s balance sheet when published. Speaking at Rotorua, Mr W. Grounds gave some approximate details of the expenditure of the board as it will appear in the balance sheet up to July 31 next. These are the figures as they appeared in print: “ Printing in New Zealand £1476. in London £540; postage, telegrams, and cables in New Zealand £l5OO, and in London £1000; salaries, New Zealand £7500, London £12.000; rent. New Zealand £5OO. London £3400; legal expenses, New Zealand £830; auditing, New Zealand £350, London (including auditing of agents’ accounts), £4OOO, office expenses, New Zealand £13,000. London £22,000. The previous year office expenses were only £6140 in New Zealand and £7590 in London. Honoraria and travelling expenses of members this year amounted to about £4OOO, approximately the same as last year. Shipping inspection cost £2BOO this year, as compared with £llBO last year. The amount paid to the National Dairy Association and its sister South Island body was £7300, as compared with

£2900 last year. The cost of the Exporter, including the postage of 58.000 copies to farmers, was £2900. The total levy this year would be about £56,000, which would be absorbed by London and New Zealand working expenses. The board’s accumulated surplus last year was £77,000, but £15,000 spent in advertising had to be deducted, leaving a reserve of £62,000 at the end of this year.” No one can say with truth that the control experiment was wrecked by parsimonious expenditure, and on looking over the figures one can only wonder how an industry can stand such a drain.

Farming Accounts.

A lecture on farm accounts and costs was delivered to the Welling-

ton Accountant Students’ Society by Mr S. J. L.

Foil, F.1.A.N.Z., recently, Mr J. L. Arcus referred to the increasing importance of accounting work ill connection with the primary producers, and stated that the lecturer had made a scientific study of the subject. Mr Feil remarked on the reluctance of farmers generally to keep financial records or anything in the nature of books, but farmers were beginning to realise the advantages gained by accurate costs and accounts. He stated that the great majority of farmers of New Zealand had not in the past made any profit at all out of the farm, although some of them had amassed small fortunes, yet these had accumulated not as a result of conducting farming operations, but on account of the farmer having been so fortunate as to have held land which had greatly appreciated in value during the time he had been holding it. The lecturer outlined the entries necessary to record the financial transactions of the farm, and the books required to give effect to these entries. He emphasised the fact that if farm accounts are to be of any real value some attempt at least must be made to introduce a system of costs. It was a difficult matter to assess the value of a farmer's labour, but instead of assessing the value on the basis of skilled labour in the cities, it should be calculated on wages paid to farm labourers in the same district. He referred to the position whereby farmers generally owned the freehold of the farm, so that rent did not appear in the accounts, and it was necessary to charge interest at current rates on the value of the land to arrive at the true position if the farm was unencumbered. Mr Feil stated that in considering farm accounts it was necessary to assume a standard value for the stock or animals on the farm, and he also dealt with the question of stud stock, whereby he advocated the writing off of the difference between the standard value and the pedigree price over a period of years. He dwelt at length on the question of depreciation in value of horses and cattle, with special reference to store cattle apart from the milking herd. In considering the question, of the disposing of crops, it had to be remembered that adjustments had to be made for the crops consumed on the farm itself and also for the allocation of labour charges. After dealing with the crop accounts in detail, he outlined the principles in regard to manure and manuring, stressing the importance of writing them off over a period of not more than three or four years. Mr Feil gave a full exposition of the principles governing overhead expenses on a farm and the depreciation of implements. He further stressed the necessity of keeping full accounts covering the milking herd and also the sheep account, the balances of which were carried to profit and loss account. At the conclusion of his address the lecturer advocated a closer investigation into farm costs and a study of agricultural economies. AGRICOLA.