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acre, and still maintain or increase his profits, may be the result of the operation of the principle of increasing costs in other countries such as Canada or the United States. Indeed, such has been the cause of the steady rise in price of wheat during recent years. But as the competition from still unexhausted virgin lands becomes less and less important, it will be possible for the British farmer to increase yields and yet maintain the rate of financial return. This, however, will not protect the consumer from the increasing cost. And should the State decide that farming capital shall be applied to production of specific goods, without regard to the trend of the market, unit costs must increase as the process of increasing yields continues.

Prices were rising prior to 1914, and it was felt by many agriculturists that they were reaching a level which would warrant greater application of labour, capital, and knowledge in agricultural production in this country. The point at which the financial return per unit of capital, etc., employed begins to diminish with the current costs and prices at any given time can be ascertained only by a somewhat detailed system of cost-accounting, although in extreme instances the farmer may become aware that the law is operating by a rough calculation of expenditure upon and receipts from a given crop. But even when the law begins to operate under one system of application of capital and labour, improvements in the method of application may obviate the difficulty.

There is, undoubtedly, scope for much greater application of labour, capital, and management ability in British agriculture. In particular, there is need for such a development of confidence in the market and the ability to organise methods of production which will return a profit as will lead to an increase in the arable area of the country. Arable land produces much more food for both man and beast than pasture on a soil of the same quality. With the guarantees now given to farmers this increase should be secured; and if, as seems probable, the upward trend of prices observable before 1914 continues after the war, the natural level of prices should be sufficient to maintain a greater area under the plough. If the level of prices is not sufficiently high to foster arable farming financial assistance may have to be continued. Under such circumstances the State should take steps to see that the

area of arable is increased as compensation to the consuming and tax-paying population for the financial assistance given. The possibility of the necessity for action along this line has been foreseen, but it remains to be ascertained whether the steps taken will be effective.

Apart from the necessity for an increase in the area under the plough there is a great necessity for use of more capital, and the application of knowledge-especially the ascertained results of practical experiments—to all farming practice. The financial stimulus of guaranteed prices may be sufficient to encourage farmers to apply all their available capital, but the hereditary capital of most farmers will not be sufficient for the whole of the necessary developments. The size and system of management of the ordinary farms are such that capital from other sources is rarely attracted to the industry. With improvement in methods of accounting and of preparation of financial statements, the joint-stock banks might be induced to provide farmers with more credit; but with the large number of farms worked on varying grades of efficiency the flow of capital from this source will be slow and unequal.

Many landlords, also, do not possess sufficient capital to provide the permanent equipment of farms necessary for a progressive system of farming. Some others possess the capital necessary, but are not anxious to see land intensively developed for agricultural purposes because of the supposed detraction from its amenity value. The whole subject of the position of the landowner in regard to the control of agricultural production requires careful consideration. Landowners naturally desire to retain their present powers, and farmers desire to obtain a greater degree of control and a larger interest in the land they occupy. Many arguments in favour of the continuance of the system of dual control are put forward by Mr. Orr and by the Sub-Committee on Agricultural Policy. But many people who are concerned with securing improvements in agricultural production are looking towards the establishment of a system of complete control by the cultivators, with the addition of public supervision, as a remedy for many of the shortcomings of the present system. All parties are agreed, however, that more capital is required in the industry. If the State can afford to pay several millions a year into the

pockets of farmers, in the form of guaranteed prices, it could certainly afford to set aside a capital sum to provide credit for farmers and landlords requiring to equip farms at the rate of interest current at the time the loan was made. The administration of such a loan fund could be carried out through a permanent board of central administrators and voluntary organisations of farmers and landowners.

But the fundamental necessity is for such an organisation of farming as can command capital from the ordinary financial sources. Under most systems of farming this requires a larger unit of land, a larger unit of original capital, and a more developed system of management than at present obtains. Bearing these considerations in mind Mr. Hall suggests the establishment of 'industrialised farming.' This suggestion is of the greatest importance from the point of view of the possibility of improving the system of management on farms. The ordinary farmer is the sole technical and financial manager of his business. He may be a good financial or business manager, but a bad farmer, or vice versa; but nobody with an ordinary knowledge of human capacities would expect the majority of farmers to be experts in both spheres. Yet experts in both spheres are urgently needed in the industry. Sooner or later the business expert must be employed, either by the large commercial farmer or by voluntary associations of farmers working as a co-operative society.

In many instances operations on farms have given poor financial results, merely because the system of distribution of goods has been weak and unorganised. Little is known, even by farmers, of the system and costs of transporting and marketing farm products, although complaints are made that the farmer receives only a comparatively small proportion of the price of products paid by the consumer. This condition cannot be allowed to persist if the farming industry is to make progress. For the small holder and small farmer an extension of the co-operative system is extremely desirable; but this method of organising the business of farms has proved to be extremely slow, and it is to be feared that if farmers become financially comfortable it may be even more slow than in the past.

But the expert is needed nearly as much in the sphere of technical management as in that of business and finance. The percolation of scientific knowledge, and the results of

experiments, through the various grades of farmers is extremely slow. Where good farming exists side by side with poor farming, there has been little attempt in many cases to raise the standard of the poor farming to that of the better. Perhaps it is too much to expect that the farmer of one or two hundred acres of land should become an expert in the three or four branches of production on which he must embark. If so, the need of the specialised manager is evident; but scope for his knowledge and activities cannot be found on farms of the prevailing sizes.

We may, however, assume that the existing organisation of the present farms will persist for many years, and steps should be taken to improve facilities for agricultural education, and to arouse desire for more knowledge. This will be more easily arranged by the extension of local farm institutes—as was contemplated prior to the war; for most of the agricultural colleges are too expensive for the sons of farmers. Demonstration farms, organised and managed to illustrate good farming practice and to show a profit, would be of great value. Where public authorities are spending money and effort in establishing small holdings the establishment of demonstration holdings has been too long delayed. Provision should also be made for the technical education of employees, both to secure the best service in the production of food and to improve their economic and social outlook. With public regulation of rates of wages some farmers will find it necessary to secure greater services from their employees; and from all points of view it is desirabl that efficiency in production should be increased by a development of skill and intelligence rather than by an increase in mere physical exertion.

Mr. Middleton states that the development of agricultural production in Germany has been due, in addition to other causes mentioned, to the greater proportion of land under the plough in that country, to the attention given to the credit system and the supply of capital, to the organisation of the business side of the industry-especially by co-operation—and to the provision of facilities for education. These are the fundamental necessities for a development of our own system; and unless these requirements are met, and a new spirit of enterprise engendered in the controllers of the industry, the community at large can obtain no benefit from a system of public subsidies. The treatment of farming as a business, in

which capital and intelligence should be obtained from every possible source, is the elemental condition of progress. Upon the quality of the business organisation depends both the financial return to the farmer and the rendering of economic service to the community.

Other remedies for our agricultural ills, besides improvement in technical methods and in business organisation, are frequently advocated. The nation is invited, for example, to establish vast numbers of small holdings, for various social and sentimental reasons held by enthusiasts; but if the whole of England and Wales were cut up into holdings, each large enough to maintain a family, the increase in rural population secured would be insignificant. Considering all types of production, the average size of such holdings would be about twenty-seven acres, and the present cultivated area of England and Wales would provide about one million holdings of this size. But according to the census of 1911 there are already almost exactly one million males over the age of fifteen engaged in agriculture in England and Wales, exclusive of gardeners, woodmen, nurserymen, and seedsmen. So that unless the holdings were very much smaller than twenty-seven acres there would be only a small increase in rural population. If, however, the holdings were smaller the standard of life of the cultivators would almost inevitably fall, although total production and the rate of production per acre might possibly rise.

There is a distinct place for the small holding in agricultural production in such industries as market gardening, poultry raising, and some parts of the dairying industry. But a vast extension of small-scale production means a reduction in the standard of production per man.

Part of the difference in the amount of the net output per person in this country and in Germany is due to the fact that in England only 16 per cent. of the land consists of holdings of less than fifty acres each, whereas in Germany nearly onehalf of the total cultivated area is made up of these small units of production. The system of small-scale cultivation and of peasant proprietorship secures a better distribution of the financial returns of the industry than a system of larger farms employing labour; but as the standard of living ultimately depends upon the rate of production per man, the system which gives good results judged on this standard ultimately gives the best results to the agriculturist.

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