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THE AGRICULTURAL NEWS. 



June 21, 1913. 



cxtnditions. he is easily satiated, then a small decline 

 in the retail price of the commodity will cause only 

 a slight increase in his purchases, and the converse 

 will be the case if he is satisfied only slowly. Under 

 the former circumstances, the elasticity of demand is 

 small; in the latter case it is considerable. It follows 

 naturally, that when the demand is elastic for a fall 

 in price, it is also elastic for the opposite rise. 



The demand, to-day, in Great Britain for a com- 

 modity like sugar is not elastic, although it used to be- 

 when prices were sufficiently high to allow of fluctuation. 

 Consequently, as already hinted, no fractional diminu- 

 tion in the price would greatly increase the demand, 

 and an increase in the amount at the same price would 

 not increase the number of purchases. The same 

 principle holds good in England, with a conmiodity 

 like salt, of which the price is relatively so low as to 

 cause few people to consider its value, and the majority 

 would use almost as much if the price rose a little as 

 they do under present circumstances. In India, however, 

 the price of salt is relatively high, and in consequence 

 the demand there is moderately elastic. 



The question as to whether the price of a com- 

 modity ought to be kept at a low and fixed rate, 

 especially when its supply as agricultural produce 

 must vary, is not a matter to be discussed in the 

 present connexion, but it is interesting to note that in 

 regard to very perishable produce like fruit and meat, 

 the current supply price must be adjusted in such 

 a way as to create an elastic demand in order to check 

 waste during times of over-production. 



This consideration leads naturally to the sub- 

 ject of other uses of certain kinds of raw material 

 besides that for direct consumption. In regard 

 to sugar, there is the enormous demand for this com- 

 modity for ])reserving and for confectionery pur- 

 poses, and in this direction there exists very consid- 

 erable elasticity of demand. In times of over-produc- 

 tion of sugar, it is through source.'^ like these that 

 the pressure would seem most easily to be relieved. 

 The demand for sweetmeats, for instance, is pro- 

 verbially clastic, and the effect of increasing the 

 quantity at the usual price v.'ould be to attract a far 

 larger number of purchasers. It must be remembered 

 in this connexion that the sale of one commodity in 

 a manufactured form is frequently limited by others, 

 as for instance, sugar and cacao in the manufacture of 

 chocolate, and fruit and sugso" in the production of 

 jam; consequently .i high range of prices for one 

 commodity, though .accompanied by low values for 



a second one may so counterbalance each other as to 

 render the position a normal one to the manufacturer 

 though extremely abnormal to the growers. 



In dealing with all questions concerning the 

 demand of the consumer, it is generally easier to obtain 

 a clearer notion of the circumstances of any case if one 

 class of society be considered at a time. In regard to 

 the consumption of sugar, as such, the lower classes 

 may consume i)er head as much as the rich; but with 

 commodities like meat, tobacco, tea and spirits, the 

 elasticity of demand increases rapidly as one descends 

 from rich to poor. And an interesting factor which 

 will be seen to enter into the subject here is 

 that of grade and brand. The reflections already 

 expressed in regard to the demand for sugar will be 

 understood to have had reference to the regular coii- 

 sumers of one grade, though some elasticity of demand 

 will be found to exist in connexion wioh the various 

 preparations of this article, as in the consumption of 

 syrup or fancy molasses, muscovado and crystals. 



Even amongst the rich an elastic demand can be 

 created by grade and brand. But this often depends 

 upon the existing degree of sensibility; some people 

 there are who care little for a refined flavour or a dis- 

 tinctive appearance, pro\ ided they can get plenty of 

 the particular commodity. The chief cause of 

 elasticity of demand amongst the rich is perhaps the 

 desire to obtain luxuries for purposes of display and 

 social distinction — a desire which is practically insa- 

 tiable. This feature of modern civilization is an 

 important factor in industries which depend on the 

 production of grapes, tobacco, rubber and similar com- 

 modities, and is actually potent in the respective 

 systems of cultivation, as for example, in the pro- 

 duction of light-coloured rubber irrespective of ite 

 strength. 



The sugar-grower, will be seen, then, to labour 

 under certain disadvantages of demand that are 

 absent in the aflfairs of many other producers of raw 

 material, and the solution of his problems in this 

 direction and even their exact comprehension are 

 difficult in view of the fact that his economic position 

 is so extremely cftmplicated.J Closer, and a more 

 organized contact with the market and consumer has 

 followed the introduction of mo'Jern central sugar 

 factories, and in this direction would appear to lie the 

 remedy for many cJf the economic difficidtics in the 

 regulation of supply and demand encountered by 

 independent growers at the present time. 



