H.—44.

During the past two years the mechanization of wheat farms has proceeded at an accelerated rate and a large proportion of the crop is now grown 011 farms equipped with the latest and best agricultural machinery. Flourmillers continue to spare no effort in improving their milling technique, and the quality of flour and other wheaten products made in New Zealand to-day pays full tribute to their efficiency. LINEN FLAX. Prior to 1939 Great Britain maintained a larger export trade in linen goods than any other country. Of her requirements in fibre only 10 per cent, was produced within the Empire, the balance being imported mainly from Russia. Linen flax is also an essential war commodity, and therefore in view of the European situation in 1935, and Russia's increasing industrial development, it became desirable that Great Britain should become less dependent on foreign sources. Attention was paid, therefore, to the possibility of increasing Empire production, and such precautions were fully justified when in 1938 Russia prohibited further exports, and when in 1939 virtually thp whole of the imports to Great Britain were cut off. Investigations into the growing of linen flax in New Zealand were first instituted by the Department of Scientific and Industrial Research at the Agronomy Division, Lincoln, in 1936. Thereafter it became a co-operative effort in which the Fields Division of the Department of Agriculture undertook field trials and the multiplication of seed, and the Agronomy Division paid particular attention to problems associated with the growing of flax and the processing of straw in the production of fibre. These investigations demonstrated the possibility of establishing a new industry in New Zealand, and it was decided to erect a small experimental factory at Waikuku in co-operation with the Andrews Twine Works, a subsidiary of Messrs. Donaghy's, Ltd. A Linen Flax Committee was set up and an officer sent abroad to study the industry at first hand and purchase the machinery necessary for the first unit. During 1939 the situation in Europe became increasingly grave and it was decided to extend operations in New Zealand to include a second factory at Blenheim. Finally, however, in May, 1940, the British Ministry of Supply requested New Zealand to grow 15,000 acres, a task of considerable magnitude in view of the fact that up till then no fibre had been produced commercially. Nevertheless, the offer was accepted, and Great Britain shipped to New Zealand 500 tons of seed, all of which arrived safely and was sown the following spring. An organization was set up under the Minister of Industries and Commerce to deal with this new industry, and a Committee nominated representative of the various departments concerned. It was decided that all field operations embracing the growing of the crop would be undertaken by the Fields Division of the Department of Agriculture. The erection of factory buildings was supervised by the Public Works Department, and the manufacture of machinery was placed in the hands of the Railway Department. The operation of the industry as a whole was left in the hands of the Linen Flax Management Committee under an arrangement whereby the Fields Division undertook the growing of the crop, the Linen Flax Section under the Department of Industries and Commerce assumed the responsibility of processing the crop, and the Marketing Department attended to the marketing of all produce. The personnel of the Linen Flax Section, with headquarters in Christchurch, comprised a Director, seconded by the Department of Scientific and Industrial Research ; a Works Superintendent, seconded by the Public Works Department; an Engineer, seconded by the Railways Department; and a Secretary-Accountant. Later a Belgian specialist was appointed as technical instructor. The Department of Agriculture was successful in contracting for and growing 13,000 acres ; factories were erected, together with the necessary housing for workmen, by the Public Works Department at the following centres : Blenheim, Oxford, Leeston, Methven, Washdyke, Mikikihi, Balclutha, Tapanui, Winton, and Otautau. In addition, a small factory was erected by Messrs. Donaghy's, Ltd., at Waikuku. Of the above, retting-tanks, involving considerable capital expenditure, were erected at Blenheim (6), Waikuku (2), Makikihi (6), Balclutha (3), Otautau (6), the figures indicating th number of tanks at each centre. The Railway Department manufactured aud installed all machinery, the largest items being 15 turbine scutchers, breakers, and tow-shakers, 20 deseeders, 40 flax-carts, boilers, and tank-reticulation, and, in co-operation with Messrs. Andrews and Beaven, the construction of 100 flax-pullers at cost. The crop on about 30 per cent, of the acreage sown proved to be too short for fibre and was harvested for seed only, leaving approximately 9,000 to be pulled for fibre. As the average yield of crop per acre is about 2 tons, this represents the handling of some 18,000 tons of crop at the factories. Three methods of fibre production are possible : — (a) Tank-retting as adopted at Blenheim, Waikuku, Makikihi, Balclutha, and Otautau. The capital cost is high, but the process, although technical, is straightforward and the finished product attains the highest value : (b) Dew-retting as adopted at Oxford, Leeston, Methven, Washdyke, Tapanui, and Winton, in which the capital cost is low but the labour-costs high. Dew-retted fibre is lower in value than that from tank-retting : (c) Natural flax in which the straw undergoes no processing beyond scutching. The cost of production is low, but the value of the fibre is also very low. All factories are now in operation and are producing fibre, and the first shipment of flax left New Zealand early in June. It is only to be expected that many difficulties would be encountered in the establishment of this new industry about which so very little was known in this country. Nevertheless, these are being overcome or evaded.

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