LAND VALUES.

Taranaki Daily News, 5 August 1920, Page 9

LAND VALUES.

ARE THEY TOO HIGH? The question of land values was dealt with by Sir James Wilson, president of the New Zealand Farmers' Union in his report to delegates at the annual conference at. Wellington. "This is an extremely difficult point," he wrote. "It is quite certain that the paper value of land has increased very materially; and especially is this the case for land suitable for dairying. If the sovereign has fallen in value, is it not likely that more pound notes will have to be given for land, just the same as any other commodity? The cost of labour generally does not enter into the case, because the land has mostly been sold in such small areas that the owner will do the milking 1 himself; but,it is evident that whatever the value of the sovereign is, the price paid for the land and the engagements entered into will remain the same when the purchasing power of the sovereign increases. I AN ILLUSTRATION. "Let me give you an instance of perhaps, the best bit of dairying land I know of—what the returns were last year and the effect upon the price of land. It is, however, an exceptional case. The farm consists of 78 acres. Running on it are S3 cows of a high grade; the young stock, horses, etc., make up the numbers to about a beast to the acre, which speaks for the quality of the land. It is close to a cheese factory, and expenses are small. The owner of the land has let it to a sharemilker, who gets two-fifths of the milk return and the whole of the returns from pigs and calves, etc., except that he has to give the owner eight heifer calves per annum to make up.for the discarded cows. The milk cheque came to £ISOO. The owner therefore gets £}ooo and the eight heifers for his share. REFUSED £lB5 PER ACRE. He has been offered and refused £lB5 per acre, because he argues that if he invested the money he would get for his farm it would not give him the same income. It may be, of course, that he has something more in his mind—viz., that he would not get much money down and the farm might fall back on his hands.' His price is £2OO per acre, so that does not seem to weigh heavily on his ,mind. The price of butter-fat was in the region of 2s per lb, and the return per cow, therefore, to the owner, about £2O a cow (that is including the value of the heifers), No one imagines, I should say, that after a few years, when the world has settled down again and the producing countries get back to normal, that the price will remain at that figure. The normal,price judging by the past, is about Is; the above owner, therefore, will have his income cut down by a half. If he had sold his land at £lB5, someone ywould have had to bear the loss; for it is. an axiom which sometimes takes time to prove, that the value of agricultural land is in the long run based upon its production. It i 9 useless, therefore, to offer an opinion as to whether land is too high at the present moment, for what the level of prices wjll be no one can foretell."