Farm Economics

New Zealand Journal of Agriculture, Volume 101, Issue 1, 15 July 1960, Page 83

Farm Economics

THOUGH in 1919 A. D. Park, the Accountant to the Department, wrote several articles dealing with farm bookkeeping and farm costing, and in 1923 E. J. Fawcett's studies of the economics of operations of the six-horse team in Canterbury crop production appeared, it was not until 1925 that reference was first made in the "Journal" to the need for agricultural economic studies.

IN that year, writing about hill country deterioration in the midwestern districts of the North Island and the methods needed to arrest it, A. H. Cockayne said: I would also suggest that a very complete study of the economics of hill-country grassland farming should be carried on simultaneously with any experimental work undertaken, and that for this purpose a small branch of the Fields Division be formed devoted to the study of agricultural economic problems, among which, to begin with, the question of the economics of secondgrowth country should be carefully studied. Economics Research Section Formed The next year a small farm economics section was formed under Fawcett, who in the “Journal” for August 192 indicated that it was desirable for a certain number of picked farms in each district to be put under a very accurate system of costing and that a large number be subjected to a survey so that they might be checked against the standard. The main object of these methods was

to obtain economic data on the farming industry of the Dominion. The survey method prevailed in New Zealand, and in August 1927 the results of the first farm economic survey, for a group of dairy farms in Piako County, appeared. Gross returns per acre and the cost of producing a pound of butterfat were computed for each farm, in addition to which the net profit was computed on a standard basis. Fawcett continued for a time with these surveys and in October of the same year he published some results for dairy farms in Raglan County and in January 1930 the results for the first survey of sheep farms. These latter were hill country units on the east coast of the North Island and the main economic index computed for them was “profit per 1,000 sheep”. From the early 1930 s until after the Second World War little was published on farm economics or farm management. A notable contribution by W. P. Riddet and C. P. McMeekan in February 1934 presented the results of a survey on pig, production on 60 dairy farms in the Manawatu district. The results showed that the most efficient farm had a return of 48 lb of pig

flesh per 100 lb of butterfat produced, and the authors considered this index was the best available for comparing relative efficiency in pig management. Farm Management Surveys P. W. Smallfield’s considerable influence on agricultural economic thought and on farm management literature became evident in 1944, when under his guidance there appeared in March of that year the first of a series of articles setting out the management practices on farms in the major farming areas of the Dominion. The articles continued for three years and many contained financial and economic data as well as information on the physical production being achieved on the farms. He was also responsible for the series of historical articles which set out the development of the farming systems of the Dominion, and on his appointment as Director of the Rural Development Division in 1945 this type of article became a feature for a period in the “Journal”. Under his direction, in March 1947, B. E. King gave an outline of the pastoral age in New Zealand and in the following month R. H. Scott published a history of cereal production. In the same year Smallfield himself traced the development of meat, wool, and dairy production in New Zealand, and began a series, “Intensive Grassland Farming”, which was continued in 1948. In these two years a considerable amount appeared in the “Journal” on agricultural economic history and

general farm management. A series of articles traced the development of farming in land districts as well as the general farm management practices adopted in the main farming regions of these districts. J. W. Woodcock started the series by writing on farming in Otago and R. P. Connell later wrote . two articles on farming in Canterbury. E. B. Glanville, in May, June, and July 1948, gave the story of farming in North Auckland. With the building up of a small staff of field officers in farm economics after 1944 training was necessary so that they could obtain some background information on farming and farm management in the districts in which they worked. This initial training resulted in a series of articles covering' farming development in countries. P. Van Praagh began the series in April 1950 by describing, the farming and farm management practices in Rangiora and Eyre Counties in North Canterbury, R. C. Schofield in June 1952 dealt with Levels County, and A. H. Mouat and J. G. Richards in February and March 1954 wrote about Clutha County. The, articles dealt with the "development of farming, .the physical factors which influenced the farming pattern,.’and the management practices in the counties.

By the early 1950 s these descriptive articles had served their purpose and there was a strong feeling among field economists that their work should have as its objective the improvement of . farming efficiency, and any material they collected should help to pinpoint farming weaknesses either in regions or on farms. There was now a swing back to the farm surveys by which farm management and economic data were collected from farms in certain areas. The results of the first of these, “Farm Management Survey in the Southern Maniatoto Plain”, appeared in July and August 1955. It showed that those farmers with adequate areas of lucerne achieved the highest net return per acre. A survey of farming in Akaroa County, appeared in November 1955 and one on the Ida Valley in Central Otago in December 1957. It was now apparent that this type of survey was a useful extension aid, as it gave factual information on farming weaknesses and the extent of the weaknesses in an area. However, there was now emerging another phase on farm economic work —the use of adequate farm management and financial records in the farm management process. In “Economic Factors in Hill Country Development” in January 1957 R. H. Scott showed how the records for an individual farm could be analysed and used, and also showed how the

economic efficiency . index “owner surplus per acre” was computed. He followed this in February 1958 with an article comparing the physical and financial results for several groups of dairy farms in New Zealand and in this stated: No serious attempt has so far been made to analyse the differences in results achieved on the farms. Some are due to climatic, soil, and topographic variations, whereas some are due to management differences; that is, the efficiency in using and combining the resources available. As information becomes available over a longer period an analysis of the economic and management data may give a lead on how to combine and use the resources more effici- . ently to achieve greater net returns. He followed this in October 1958 by describing farm production forms which could be used to trace the physical production from farms over a period, and in July 1959 showed how the analysis of accounts could help in diagnosing weaknesses in a farm enterprise. Farm economic work as illustrated from writings in the “Journal” has now passed from the general to the particular and is assuming its real role as an aid to the farmer in assisting him to make sounder decisions on the combination and use of his resources.