AGRICULTURAL DEPRESSION.

Putaruru Press, Volume VI, Issue 237, 17 May 1928, Page 8

AGRICULTURAL DEPRESSION.

A NEW IDEA. For Meeting Position. Easily available finance is rightly considered one of the first requisites to enable many farmers to benefit in that respect, but from Bug and comes an argument which in pxautice would eliminate to a large ex lent the matter of finance and winch is unique as it is .seemingly incompatible with, usually accepted theories. It i s an exact antithesis of New Zealand’s constant cry for more production and is to the effect that “ agricultural depression can be met by the adoption of less intensive methods ot farming. This proposition formed the topic of ?. debate by the Agricultural .Students* Association in Lancashire. The broad principles concerned naturally make it a subject of interest wherever agricultural effort is paramount and it is cerwith the object of selling every bushel of wheat that could be produced at the best possible And the result leaves little to complain about. Fluctuations in Prices. Tlio suggestion that farm produce of all things could be restricted in output at a psychological period cannot, of course, be taken seriously; the supply of agricultural products is only partially under human control and any adjustment in supply must necessarily be a prolonged process. Further, the price of agricultural produce is subject to variations not only from year to year but also during the same season, and the task ot regulating the supply in accordance with these fluctuations is certainly not one that can be taken up at a moment’s notice and immediately discarded on a return to more favourable conditions.

Above all, perhaps is the question of turnover, a phase as important to the agricultural industry as it is to any other business. It i s not so much the profit per pound that is important, but rather the profit per pound multiplied by tli e number of pounds sold, and naturally the smaller the margin of profit per pound, the greater the need for increased turnover, provided, of course, that the increase can be brought about by a means within economical limits. Fo r instance, if the maintenance ration of a cow cost lOd and the production rate for a gallon of milk about •id, production cost would be Is 2d per gallon— not a particularly attractive proposition at present levels. But if the cow was giving five gallons, with an expenditure of Is 8d on production rations, bringing the total cost of food to 2s fid, the cost of production would be only 6d per gallon. Attention to Quality. In addition to maximum production, of course there must be an endeavour to produce the highest quality possible. Thus the farmer will create a better demand for his output and by this means he should be able to make a much better financial showing than if he were to restrict his turnover in the hope of forcing values to a higher level. Under one circumstance only could restricted production be condoned ami that is when the law' of diminishing returns begins to operate, when further production cannot be brought about at an economical cost.

Agricultural depression cannot be remedied by less intensive farming. Once we begin to farm below our own ability and to dodge the land, the land is going to dodge us, but improved methods of cultivation, reduction of labour costs, a fuller use of mechanical and scientific aids—in short, the most efficient means within the farmer’s financial reach—offer the surest and safest way to prosjicrity. tainly worth while examining the various arguments put forward in favour of it. Production and Returns. It was contended in support that, although large crops were very acceptable from the public point of view, the farmer knew that when he had a good harvest everyone else was in a similar position, the consequent oversupply bringing down prices. Thus increased production was almost suicidal from the standpoint of the farmer. When prices were low, therefore, the farmer should pursue less intensive methods of cultivation and concentrate on cutting down production costs. No matter how- weary he may be ot hearing the cry for more production, it is doubtful if any New Zealand farmer could be brought to an acceptance o\ this opposite argument as a sound or logical attitude to adopt towards a con aition of .depression. At first sight the suggestion might appear reasonably sound, since it seeks its justification in the law of .supply and demand, but close examination shows it to be rathei a short-sighted submission to tin* exigencies of that law' when an endeavour to make the very best of existing circumstances would be productive oi much more definite results.

The fact that the law of supply and demand is at times antagonistic to the most payable prices has to be accepted by all classes of producers, and if any- * thing, it demonstrates the vital necessity for a considered policy of eo-ordin J a ted production and marketing at all times. Canada supplies a striking example of what can be accomplished in this direction. Tn 1023 Canadian wheat, growers reaped a most bounteous harvest and prices slumped disastrously, the decline being accentuated considerably by the frenzied marketing by the farmers themselves. Out of the ruins of that harvest sprang the great wheat pools—not for the purpose of restricting or even controlling production.