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steps have been taken: two gangs of men were employed for some six months in scouring the country, and 1,250 wild sheep have been killed, many of them very scabby. No wild sheep are now known to exist there ; but the Inspector of the district cannot bo certain until he has had an opportunity of trailing sheep over the country. The Loan and Mercantile Agency Company own the Birch Hill and adjoining stations, and for the last twelve months they have apparently done everything possible to thwart the action of the Inspector. Had they co-operated with him, there is very little doubt that the question of whether the country was clean or not would have been decided. The Committee consider that the action of the Representatives of this company in this locality is deserving of the severest censure, in setting an example that would not be tolerated in a private individual, and which is most prejudicial to the best interests of the colony. Until this company is made to do its duty, this part of the country must remain on the infected list; but it is fair to say that the company dispute the ownership of the leasehold. At Kaikoura the flock that was infecied last year is now clean, but there has been a v£ry remarkable outbreak in another direction. The country is known as the Bui Bui Run, and was considered by the owners to be free from scab, having been uustocked for about two years. In February last scab was discovered in an isolated flock of 800 sheep, which were at once destroyed. The sca,b was supposed to have been about a month old; but all the efforts that have been made to trace the cause of the disease have failed, and, until that is discovered, the country cannot be considered safe. At Miranda scab was discovered in a flock of 200 sheep. These sheep were not destroyed, but were ordered by the Minister to be cleaned. Your Committee consider the sheep should have been at once destroyed. Thus, from various causes, New Zealand is still suffering from being an infected country ; and, while your Committee recognise that good work has been done during the last year, they would urge upon the Government the absolute necessity of increasing vigilance until a clean bill of health can be shown for the entire colony. Branding Sheep. Your Committee recommend that tattoo-marking on any part of the sheep should be a legal mark; and that a wool-brand should not be compulsory. The Committee would also strongly urge that no sheep should be allowed to travel on the public roads without some easily visible wool-brand or mark. Eabbits. The number of rabbit-skins exported during the last year was 12,593,171, being an increase of nearly half a million on the preceding year. It would appear, therefore, that the number of rabbits is still increasing ; but it is hoped that their encroachment on any further area of country will be much less rapid than has been the case in the past. The Conference held in Sydney last year, after the most exhaustive experiments and most careful investigation, has reported that none, of the diseases that came under their notice were of any practical use in getting rid of the rabbits, and they were compelled to fall back on the three known methods of dealing with them, namely, poisoning, the natural enemy, and fencing. As to poisoning and the natural enemy, the evidence taken before the Committee goes conclusively in the same direction. Ferrets and stoats and weasels are allowed by all to be the cheapest and the most self-acting mode of dealing with rabbits. Your Committee, therefore, are at a loss to conceive on what grounds the Government have decided to discontinue the purchase of ferrets bred in the colony, and also to cease the importation of stoats and weasels. Your Committee believe that this course will prove a great national calamity, and they strongly urge the Government to reconsider the matter, and beg them to encourage the breeding of ferrets in every possible manner, as well as to continue the importation of stoats and weasels in large and ■continuous numbers. As distemper at times carries off large numbers of ferrets, it is very important that efforts should be made to ascertain whether inoculation could not be resorted to with good effect. The Committee further recommend that private individuals and associations should receive the same concession as that now extended to Rabbit Boards, namely, £1 for £1 as subsidy on the amount raised by them for importing the natural enemy. It being almost impossible to carry out concurrently, with advantage, the use of the natural enemy and the employment of men with large packs of dogs and traps, such means should be discouraged as much as possible wherever the natural enemy has been fairly established. Fencing has been tried in North and South Canterbury and in Hawke's Bay, so far, with unqualified success. Taking into consideration the trouble and hardship that small settlers in the neighbourhood of large tracts of uncultivated land are subject to from the incursion of rabbits, the Committee suggest to the Government that assistance should be given to enable them to protect themselves, by supplying them with wire-netting fencing on easy terms, without interest; and by carrying the material on the railways free of cost. The evidence taken before the Committee is of a very contradictory character, and proves conclusively that no hard-and-fast rule can be laid down for the destruction of rabbits. The methods used must vary with the varying conditions ; but, in order that these conditions should be understood by those intrusted with the carrying out of the Act, the Committee think it very important that the officers shotJld be removed as little as possible from one district to another. Where Babbit Boards exist the powers and duties of Inspectors ought to be defined. In these cases the District Inspector ought to have a seat ex officio on the Board, but not to be chairman ; and he should be held responsible for the suppression of the rabbits in the Board's district.