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PART ON E—INTRODUCTION I. IMPORTANCE OF SHEEP-FARMING 1. IMPORTANCE OF FARMING TO NATIONAL WELFARE New Zealand is a farming country. It is from the proceeds of selling overseas the produce of our farms that we have obtained the money to buy steel to lay our railways, to buy machinery to make our roads, and to acquire cars, lorries, buses-, carriages, and wagons to provide transport. It is with the proceeds of our farm-produce that we have bought merchandise to stock our many shops. It is to load that farm-produce that overseas ships come to our ports, providing work in many trades for drivers of trucks and for waterside workers. In fact, it is veritably from her farms that New Zealand lives. This is the basis of all our life. We consider that this is the principle that must underlie our every step. It should be taught to our children in the schools. It should be understood by all our people. It should be given consideration in every Act of your Legislature and in every provision of your Government. So surely as her farming declines, so declines New Zealand. This does not say that farming is the only occupation of importance in New Zealand. All our people contribute to our national wealth—each according to his chosen task. Transport, housing, education, shops, workers to make and mend streets, all these contribute to welfare no less than the farmer whose products are sold overseas. But it does say that in our land is our heritage. The condition in which we are to leave our land to-day has an all important bearing on our national welfare to-morrow. High levels of farm production do not necessarily mean good maintenance of the land. In reaping the rewards of farming production we must be careful to putenough back into the land to maintain and improve our asset. 2. IMPORTANCE OF THE SHEEP INDUSTRY The sheep industry contributes about 60 per cent, of our farming production. It is therefore our leading industry. That does not mean its interests should be allowed to impair the interests of any other industry. It does mean, however, that the interests of no industry whatever should be allowed to impair unreasonably the interests of the sheep industry. We feel confident that, given the encouragement and the opportunity, our sheep-farmers can maintain the standard of our sheep-farming equal to, if not better than, those in any other part of the world. But as an over-all policy there must be an encouragement of good farming —rewards to the efficient farmer who gets the best out of his land while maintaining and improving its condition—penalties for the bad farmer who, when given every opportunity, lets his land deteriorate. This should be the guiding principle of all land policy.