FARMING PANIC

Rotorua Morning Post, Volume 2, Issue 304, 18 August 1932, Page 2

FARMING PANIC

FALLING PRICES ; PLIGHT OF JAPANESE FAKMERS CAUSES CONCERN. TALK OF MORATORIUM. Depression in Japan hides itself in the cottages of the peasont farmers, and the comparative absence of unemployinent — officially estimated at betwen 300,000 and 400^000— bas hitherto only masked its extent, write.s the Tokio correspondent of The Times. The farni problem can be simply stated in a few figures. The Japanese farmer, in the mass, is a specialist in riee-growing, to which he adds the eultivation of silk as a lucrative side-line. The average price of riee in 1926 was 16s a hushel; it is to-day about 9s. Raw silk, which' in 1926 was selling at an average price of £140 a bale, is now about £35. The value of farm land declined in 193031 by an average of 21 per cent. In the previous year it had fallen by 7 per cent., so last year's fall, which is continuing at an accelerated pace this year, is suggestive of an agricultural panic. Farming in Japan is a major national industry conducfed in units of market-garden size. Farms of less than 1& acres constituted 35 per cent. of the total, according to the last survey of the Department of Agriculture; farms between lh acres and 21 acres, 34 per cent.; 91 per cent. of all farms were under five acres. The smallness of the area, the high "human" cost of production — for th'ough the farmer and his family get but a bare living by their labour, the employment of so large a number on so small a scale is uneconomic — mean that a comparatively small fall in prices causes discomfort, and a fall of over 50 per cent., such as has acj tually occurred, is a catastrophe. On i farms like these one-half of Japan's j 60,000,000 people live — six families out of every 12 — and 80 per cent. of Japan's soldiers are drawn from the farms. Heavy Dehts. As the prices of his produce sank, the Japanese farmer's debts gradually mounted, until he is now carrying a load which, as things are, he cannot possibly pay. The latest and best estimate of farm debts is that of the Japan Hypothec Bank, a semi-State institution created to deal with the finance of agriculture. Its computation shows that the total is at present in the neighbourhood of 4,585,000,000 yen, approximately £458,000,000 at par of exhange. This works out at about £100 per family. On the debt the annual burden would be £45,000,000 a year if the farmer paid interest at the rate of 10 per cent. Unfortunately he pays more. Of his total Ioans, 57 per cent. have been advanced by private l'enders at a nominal rae of about 12 per cent, and a real rate said to be between 20 and 30 per cent. j Farms so small, employing the farmer and his family, and exacting the hardest but not the best-directed j or most profitable work from them, are uneconomical. A calculation made some years ago showed that Great Britain produced every year, with the 1 labour of some 2,000,000 people, agricultural produce of approximately the j | same value as Japan with 16,000,0p0 ■ people engaged on the land. But it j is idle to say that small-scale farm- i ing is uneconomical. Japan must ac- j commodate half the population of the | United State on an area equivalent' to that of the State of California. But while in California one-third of the total area is under eultivation, in ' mountainous Japan the cultivated area is only one-eighth. Japan has provided for ber increasing population . by developing intensive eultivation till it may be said that the land is super- j saturated with people. : The Price of Land. Professor Nasu, a leadmg agricultural economist, states that the price of farm land in Japan is two or three times higher than in European countries. 'In good years 6,000,000 families can live on the land in Spartan comfort. In bad years they cannot, and the result is a load of debt which : the State, the bankers, and the farmers' creditors must somehow lighten. The farmer also complains, with jus- : tice, that he bears more than his slmrp nf taxation. Since 1910 taxes

(including rates) have risen sevenfold in some villages. Urban taxes are based chiefly on income, country j taxes almost entirely on land. Village ; education is expensive. By transferring the cost of compulsory education ; from the provincial budgets to that of the nation the Government could do something to equalise the burden. Revision of taxation is thersfore among the remedies the farmers demand. But it is the debt, with its crushing interest, that they fear most, and hence their demand for a threeyear moratorium. But if the farmer is to have his debts as good as cancelled, why not the shopkeeper, the small industrialist, and the distressed public in general? Perceiving th'e drawbacks of the moratorium, some politicians advocate devaluation of the yen until, instead of being worth 10 to the pound, it shall be worth 20. ■ The farmers themselves urge that their debts were incurred when a yen in gold would buy only one-third of what it buys to-day. But Mr. Takabase, the Finance Minister points out that as Japan is off gold alredy devaluation ckn have no effeet. The problem is not insoluble, though it will requp'ire much careful administrative effort. It should be possible, for example, to convert the bulk of the farm debts from a 10 or 12 to a 5' or 6 per cent. basis. In providing the credit necessary the Government would seem to be justified in stipulating that the capital should be written' down in accordance with the rise in the value of gold since the loan was contraeted. Inflation is the easier remedy that all hanker for, but solong as there is a surplus of commodities inflation of eurrency simply sends the money back to the bank cel- • lars. But it seems clear that unless the increased v&lue of gold is recognised and debts written down accord-' ingly, no palliation will be found for the plight of the Japanese farmer.