H.—29b,

In ray opinion, the scheme put forward by the Committee does not provide the most suitable means of meeting the position. Any rate of subsidy based on transport costs only must be comparatively high to afford the farmer adequate assistance, and consequently the Committee has recommended 75 per cent, subsidy on rail transport and 60 per cent, subsidy on road haulage costs. A subsidy of 75 per cent, on rail transport will mean that the farmer pays only 25 per cent, of railhaulage costs, and this, in my opinion, will be insufficient inducement to purchase from the nearest works—rail transport is comparatively cheap. It should be noted that, in so far as overlapping is not overcome, the State bears 75 per cent, of the cost. The scheme does not provide for equitable treatment in that the farmer forced to purchase highpriced lime is placed in a relatively less advantageous position than those more favourably situated. It is desirable in making grants by way of subsidy to treat all sections in the same manner, and thus preserve an equitable distribution of the subsidy. This is not done by the existing system, nor will it be accomplished if a subsidy based on freight charges only is adopted. I feel that a subsidy based on the Land Fertility Scheme of Great Britain, which provides for a percentage rebate to the farmer on the cost of the lime delivered at the farm gate, would best meet the needs of New Zealand. The percentage rebate could be readily adjusted to meet changing conditions and would not favour any section of the farming community. Thus at the present juncture, when it is imperative that production should be increased to the utmost, a subsidy in the vicinity of 30 per cent, could be made applicable. If this were done practically no farmer would be asked to pay more for his lime than he is paying at present. The fact that he himself pays 70 per cent, of rail transport costs would ensure that the overlapping would be reduced to a minimum. Encouragement to use lime would be given to farmers some distance by road from rail or works. Assistance would be given to lime-manufacturing companies in that those best placed to meet the local demand would receive larger orders and should thus be enabled to produce more efficiently. Over a period it may be that certain minor units would be displaced. It has been argued that such a scheme would create monopolies, but I feel that this is an overstatement in that in such an essential industry as lime-production a greater measure of control should be exercised than is done at present. We would admittedly have a tendency towards monopoly, but it would be a controlled monopoly. Furthermore, the farmer would not be precluded from obtaining lime wherever he chose, provided he was willing to pay his share of the cost of transport. In the disadvantages set out under the Land Fertility Scheme in the report it is stated in (b) " that the farmer's choice would be restricted unless he were prepared to pay his percentage of the extra transport charges " and (/) " by reason of its zoning effect it would tend to increase the output of certain works and decrease the output of others." I cannot but feel that these are advantages in favour of an adaptation of the Land Fertility Scheme— in the first instance overlapping is reduced to a minimum, and in the second case the building-up of a greater output should ensure increased efficiency and a possible reduction in price. I estimate the cost to the State of such a scheme, based on 30 per cent, subsidy and a usage of 500,000 tons, at £175,000 to £200,000 in the first year. If this figure is considered to be too high, then some considerable saving could be effected if the subsidy were such that in no case did it reduce the farmers' total cost to a figure below the cost of lime ex works. Wellington, 25th October, 1939. N. E. Dalmer. 98. ACKNOWLEDGMENTS. In conclusion, the Committee would like to thank all those persons who tendered evidence on their own behalf or on behalf of various organizations for the helpful manner in which their representations and suggestions were made, and also for the free manner in which any further information required, confidential or otherwise, wa,s made available to the Committee. Thanks are also due to the lime-producing companies for the prompt and able maimer in which statistical and costing data were forthcoming. The able assistance extended by officers of the various branches of the Department of Agriculture in districts visited by the Committee was greatly appreciated. The Committee gratefully acknowledges and appreciates the manner in which expert and technical evidence was made available. Thanks are due to :■ — (1) The Cawthron Institute, Nelson : (2) The Canterbury Agricultural College : (3) The Crop Experimentalist, Department of Agriculture : (4) The Inspector of Fertilizers, Department of Agriculture : (5) The Director and other officers of the Fields Division, Department of Agriculture : (6) The Soil Survey and Geological Survey Divisions of the Department of Scientific and Industrial Research : (7) The New Zealand Railways Department: (8) The Commissioner of Transport: (9) The New Zealand Road Alliance : (10) The Lands and Survey Department: (11) The Animal Research Division, Department of Agriculture. This chapter would not be complete without some reference to the ground work done by Messrs. L. C. Scott, of the Department of Agriculture, and N. E. Dalmer, of the Department of Industries and Commerce, in their compilation of the preliminary report on the agricultural lime industry, upon which report this investigation was based. The report gave the Committee a clear background on which to commence operations. The Committee wishes to record its indebtedness to Mr. L. Vogtherr, Secretary, and to Mr. L. M. Wilson, Stenographer, for their valuable and painstaking work in attending to records and all secretarial work in connection with the Committee's investigation.

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