C.—l.

REPORT.

Review of Past Year. Reports from the various districts indicate that, generally speaking, the past yeai has been a satisfactory one for Crown settlers and other sections of the farming community both froifi the point of view of production and that of prices for primary products. Although the summer was unusually warm there was in most districts a sufficiently well-balanced rainfall to ensure a good growth of pasture. With the exception of the settlers in the far southern districts, where the sjring and summer were unduly dry, those engaged in dairying experienced a good year. Prices for fat lambs and all classes of farm stock were good ; but wool returns showed a sharp decline on the high prices received during the previous year. In the cropping areas the grain was harvested in good condition and satisfactory yields were obtained. Land revenue showed an increase on last year's figures, while the rent outstanding, including postponements, has decreased. An important feature of the work of the Department during the year las been the operations carried out in connection with the development of waste Crown land and the reconditioning of properties which have reverted to the Crown. Details of the various blocks under development, together with particulars as to the methods adopted and the progress made, are given farther on under separate headings. During the year a considerable amount of work has been involved in connection with the investigation of applications made by Crown tenants under the Mortgagors and Lessees Rehabilitation Act, 1936. As a result of the adjustments which have been made in the cases so far dealt with, the tenants concerned should be materially assisted in carrying on successfully in future. The action which the Department is taking in the direction of assisting in the preservation of the bush on high and steep country is dealt with under a separate heading in this report. Selections of Crown and settlement lands on all tenures during the year totalled 232,225 acres. This subject is dealt with more fully farther on. At the 31st March the tenants on the books of the Department numbered 36,323, occupying a total area of approximately 18,269,000 acres. Pastoral runs account for 8,567,217 acres, while 1,801,084 acres of purchased estates are held under the provisions of the Land for Settlements Act. Legislation. The Reserves and other Lands Disposal Act, 1937, contains twenty-eight sections dealing with Crown lands, reserves, &c. Protection of High and Steep Country and Bush-preservation generally. In the last annual report mention was made bf the attention being given to the matter of the necessity for bush-preservation and the protection of high and steep country generally. The Department, in co-operation with the State Forest Service, has continued to investigate this matter in an energetic manner, with the result that during the period under review areas of Crown land totalling 186,763 acres were handed over for proclamation as permanent State forest. The great bulk of this area was high country, on which the existing bush should be preserved in the interests of the conservation of stream flow and prevention of erosion. Approval was also given during the year to over 32,000 acres of provisional State forest reserves being set apart as permanent State forests, while areas totalling approximately 62,000 acres were constituted as permanent reserves under the Scenery Preservation Act, 1908. Strong opposition was encountered on occasions to proposals to withdraw certain areas from possible settlement in the future, but the Department is convinced that the action taken was in the public interest. Preliminary investigations have been made into the question of reserving further areas of high country, with the result that certain blocks have tentatively been selected for handing over to the State Forest Service for administration as protection forests. In this connection it is necessary to comment that, while it is the Department's policy to arrange for the reservation of blocks of Crown land which should not be opened for settlement, it has, apart from a few bush areas purchased for scenic reserves out of the very restricted funds made available for scenic purposes, been impossible to take any action with respect to high-country lands held under private ownership which should be acquired and administered by the State. The Department has no vote for the purchase of private lands for purely water-conservation and protection purposes, nor any legislative authority to acquire such lands. Under present circumstances it is therefore necessary to restrict operations to Crown lands. There is, however, ample scope so far as Crown-owned areas are concerned for a considerable amount of action in the way of the reservation of such areas, and it may be mentioned that in the case of any high country which has been leased and which may revert to the Crown full consideration will be given to the question of its reservation for protection purposes. The matter of the control of high pastoral country now in occupation has also received a good deal of attention. Pastoral "licenses granted under Part VI of the Land Act, 1924, entitle the holders to the exclusive right of pasturage over the lands concerned, but give no right to the soil or timber or minerals. The Act provides that every pastoral license shall contain a condition to the effect that

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