THE FARMER’S STATE.

Shannon News, 12 April 1929, Page 4

THE FARMER’S STATE.

\ WORLD-WIDE (TROUBLE. ENGLISH ANALYSES. FALL IN FOOD PRODUCTION. ; nsr-rt' Agriculture in Great Britain has been in a parlous state for many a long clay. Farming has so consistently yielded a goodly crop of Jeremiahs that we have got hardened to their cries. But when it is asserted that other countries, those aIJ but virgin fields of America and the Antipodes are, too, in a bacl way, it is time to look into the thing, states a London correspondent. The World Economic Conference which sat in Geneva two years ago declared that agriculture was in a de- . pressed state in all parts of the world, and that this Was due to the fact that the farmer was getting low prices for his products—low, relatively, to the prices of other products; low owing to an over-production which was not real, but greater than the consumifig capacity—as measured by' their power to buy it —of the peoples. * Prices and Costs. How is it that the world price of agricultural produce is substantially below the average cost of production? . That was the question posed by Sir .Daniel Hayy, technical adviser to the Ministry of Agriculture, in an address to the Institute of Foreign Affairs. In his view, one factor is the inability of the farmer to alter the character of his business in response to the market. If he docs alter it he can only do so slowly, hampered by the., seasons and rotations. Secondly, there are fluctuations due to the seasons, a big or a small harvest. Is there a surplus? If so the price at which the farmer sells his surplus determines the price of the whole. Sir Daniel cited in support of • this thesis the case of a crop—potatoes —almost entirely home .grown; of hops, a crop which has to be largely supplemented ,-by foreign imports; of wheat. The price of a glass of milk is one that most people would say offhand was determined here at home, and they would be mightily astonished to discover the fact that the price of milk hero is determined by the price of New Zealand and Canadian cheese. As all the world knows, there was ,a fight, between tlie farmers and the dairy com- ■ panics, and the . end came with a do- ' cision to pay certain prices per gailon, • and that surplus milk—over contract quantity—be paid for at 2d. above the price of imported ehce?e*i The milk it dustry—no more, or less than anv other—follows the law that the prices got are determined by the price that the surplus will fetch. . • Sir Daniel remarked thar the British farmer always talked as if the price of wheat was made in the Chicago wheat pit. In his view, the Americans were in reality justified in i.heir contention that the price was made in Liverpool The price to the American farmer is determined by internal competition, which goes on until it has worked down tc- the price which can bo got for the surplus in Liverpool—that is, until the pressure can be relieved by export. Pooling Interests.

The American farmers turned to Hoover, who .would do nothing for them until they-pooled their interests. “We cannot help.-you.” said Mr. Hoover, then Minister for Commerce, “ until you are all in union, and until .the whole of your wheat is marketable by one hand. Then you can have your own price at home, just ■ what ,you like, and you .can send the rest to Europe to get what Europe will give for it, and spread the price over. ’ ’ But for this all the farmers must come in. Duties are 'of no use in keeping up prices within a country, because internal prices are determined by internal competition. 1 The lesson Sir Daniel drew from the United States was that, unless you have combination within your own country, surpluses will force down prices.. He cited examples of pooling complete or partial. Czcelio Slovakia and sugar-beet, the Canadian

wheat pool—which, if it had not been able to fix the price at any particular figure, had at any rate freed the farmer from the operations of the middlemen and the merchants —the voluntary wheat pools of 'Australia and United States, and Russia’s compulsory State pool. Another method of price control has been tried in Norway and Sweden. Only the State is allowed to import wheat, which it then distributes, afterwards buying in the home production at such a price as encourages the farmer, and it acts as the selling agency. Bath Norway and Sweden nave found it a difficult task, but it is so far the only one which seems to have managed to work at all as a method of balancing off the State necessity to keep the tanner going and yet to meet the di r/iands of its consumers for cheap food, method, however, involves drastic interference ■with private trading. . While 'Sir Daniel Hall stresses the influence of surplus production in pulling down piices. it has-to be noted that the present world malaise in agriculture has been assigned not tg low prices, but to falling prices. "The effect,” says Mr. R. R. Enfield in the journal of the R.1.1.A., "of a failing price of agriculture is of two kinds. The first is due to the long period and turnover which is an essential feature, of the agricultural industry. If the general price level is falling, then, owing to the fact that it takes from seven .to fourteen months to complete the cycle of operations on-a farm, the farmer spends his money in goods that ho had to buy at a higher price level, and receives payment for his produce at a lower price level, thereby diminishing the profit he would otherwise make. If the movement is very fast, he may make no profit at n -1. The second Sffect is upon the fixed charges on farming and those costs such as wmgos which for various reasons can only be adjusted downwards only with difficulty. As the price level falls; the former finds that each year he must sell off the farm larger and larger

amounts of produce in order to meet the lixod charges.” Mr. Enfield links falling prices to currency problems, and does not see hope that, an agricultural revival can be brought, about by any purely agricultural means. He looks rather to the general level of gold reserves in the central bank of the world, to the international gold movements, the changes in discount, rates, etc., as the chief factors in determining the prosperity of the world’s agriculture

Exodus from Land. In the meantime competition is the rule, and “if no alternative can Infernal, there is a danger.” says Sir Daniel Hall, “that the distinctive power of unrestricted competition between the farmers of the world will tend to destroy the agriculture of the world.” Here in Britain, of course, the exodus from the land has long existed. It would be greater to-day than it is but for unemployment. In France, in spite ,of tradition, Italian immigrants are coming in to make good the drain of man power to the cities and urban industry. Even in the United States .... This is a' slow change, by which agriculture responds to low prices. You cannot adjust production quickly; but it does slowly adjust itself by the retreat of men from the land., ” lie says. And there lies the danger. What, in fine, was Sir Daniel Hall’s conclusion is: “We cannot afford to go on letting these men go. The actual production of food in the world is, in relation to population, less than in 1914. Wc are actually in a short position, though the shortage cannot declare itself because of the difficulty that so large a proportion of the population experience in making their demand for food effective. Therefore, it is necessary for States like our own to consider what steps they can take to consider this flow, lest we suddenly slip over the danger point and find ourselves in a real scarcity because there are no longer the people on the land to proluco food for use.”