174 MARKETS. 



The construction of a railway line may for a considerable dis- 

 tance along that line become an active force in inducing the 

 production of dairy products rather than of beef. 



The farmer having decided what he will produce in his own 

 interests and to his best advantage — and if his decision is not 

 made with care and discretion he will go under — the extent to 

 which he can sell at a price which he may deem remunerative 

 determines, as already indicated, the extent to which he will 

 produce. The wine industry in South xA.frica has been practi- 

 cally stationary for twenty-five years and more. It often suffers 

 severe barometric changes of price in the same year- The 

 wine farmer's market being limited, he produces what experience 

 has taught him to be sufficient to maintain the selling price at an 

 average level of £4 to £5 })er leaguer. Climatic conditions niav 

 vary the quantity produced from a half to a full crop. If the 

 yield is a full one, there is over-production, and the price for 

 distilling wine drops to £3 and £3 los. per leaguer. If the yield 

 is a small one, the jjrice soars to £6 or even to £8. An ex])ort 

 trade to a large market would steady prices, allow of the pro- 

 ducer investing with confidence because he could calculate his 

 probable return ])er acre, and stinuilate greater production. 

 There is no clearer illustration than is to be found in the ostrich 

 feather industry as to the effect of a market contracting. A 

 sudden change of fashion abroad, followed by the European War, 

 precipitated a catastrophe. The i)rice fell from £2 i/s. gd. per 

 pound at the end of 1913 to £1 i6s. 6d. in IQ14, 15s. 8d. in 

 1915, and £1 IS. 6d. in 1916. The number of ostriches was 

 746,657 in 1911, and 399,028 in 1916, and serious thought is 

 being given to a proposal that exportation should be prohibited 

 for a period or curtailed in order to create a scarcity in the 

 American and European markets and force up prices. Another 

 example — one fresh in the minds of South Africans. OwMug 

 to the greater demand created by the European War for meat, 

 prices, already on the up-grade before the war. increased to an 

 extent which made South Africa's entry into the European 

 market a success far sooner than would otherwise have been the 

 case. The greater demand for cattle naturally increased their 

 price- Probable conditions after the war encourage the belief 

 that the market will continue to be active. Attention is there- 

 fore immediately given to improving the beef breeds of cattle 

 in this country, to feeding and to greater production. 



Fruit and maize cultivation increased rapidly with the open- 

 ing up of oversea markets. 



The extent to which the farmer will produce being deter- 

 mined by market considerations, the most profitable market for 

 him is the one which is reached most cheaply and in which de- 

 mand exceeds or at least equals supply. As soon as supplv 

 exceeds demand in the local market. ])roduce begins to be trans- 

 ferred to the next nearest market in which the opposite condition 

 (demand exceeding supply) obtains. And for the same reason 

 the best market may recede until it has to be found thousands of 



