MINUTES OF EVIDENCE. 



23 Sfftteinber, 1919.] 



MR. JAMES DONALDSON. 



[Continued. 



bushel from the soil is a costly business. It is quite 

 true that the yield may be increased by careful 

 cultivation of the land! and by manuring liberally, 

 but whether the cost of these workings and fertilisers 

 is to be justified depends upon the market price of 

 the product. As Lord Ernie, himself, has pointed 

 out, the general law which agriculture obeys is the 

 law of diminishing returns (Prothero, R.E. 

 li Patriotism and Agriculture/' Edinburgh Iteview, 

 October, 1915) and in proof of this he quotes a 

 Kothamstead experiment where the application of 

 200 Ibs. per aero of a complete fertiliser to a wheat 

 crop gave an increase in crop of 18 bushels, 'whilst 

 a further 300 Ibs. gave an additional increase of 8 

 bushels and the application of a third dose of 200 

 Ibs. added only a further increment of 1-6 bushels. 

 With high prices, and on a rising market, then, there 

 is every justification for a vigorous policy of 

 management on the farm, and the farmer should 

 farm high and stimulate his land to produce its 

 utmost. On the other hand, with low prices, or in 

 the face of a falling market, the reverse policy is 

 indicated all idea of intensive farming with con- 

 sequent high production must go. The mistake that 

 brought disaster to so many men in the 'eighties 

 and 'nineties was their attempt to keep up their 

 production in the face of a falling market. " High 

 farming is no remedy for low prices," and thirty 

 years of low prices have burned this lesson deep into 

 the minds of most farmers. 



11,293. (8) The remedy for low prices is the ^ re- 

 duction of costs and the reduction of output. This 

 was clearly demonstrated in England during the 

 agricultural depression, and the game lesson may be 

 read by anyone in the history of agricultural 

 development in the new countries. In England there 

 were men who made money during the depression ; by 

 good luck, or good judgment, they realised that the 

 time for intensive farming had gone, and by a 

 drastic cutting >i COftt and a reduction of output 

 they made good during the longest spell of adverse 

 markets that the agricultural industry has ever had 

 to fate. Most of them achieved their pill pose In 

 giving up arable farming. but. In re and there, men 

 stood out conspicuously as sueeessful arable farmer-. 

 who, by occupying larger areas of land, and applying 

 the minimum of ea|uta! to it, were able to take a 

 si'iall acreage profit which in the aggregate fully 

 justified them as m.tnagi is farming successfully to 

 meet the conditions of the dav. In the newer 

 countries the conditions under which men have had 

 to produce have been exactly (lie same. If the cost 

 of the long rail and sea carriage In- taken as a 

 set olf against cheaper land, the American farmer 

 nas face to face with the value problem, and he 

 solved it in the same way; he applied the minimum 

 amount of labour and capital to his land and made 

 no attempt to iiurea.se the yield of hi land above 

 its natural capabilities, with the result that, with 

 a crop of only half the quantity averaged in this 

 country, coupled with wages on a scale that we never 

 knew he was able to succeed while we failed. 



1I.2!M. (9) That uliieh some men did in England 

 during the depression, that which men have always 

 done in the new countries, can be done by men 

 generally in this country if the market drives them to 

 it. They can etit down their fences and lay fields to^ 

 gether for mechanical cultivation in large areas; th"y 

 can thus reduce their labour bill while paying high 

 wage.s. at the same time, to the men retained; they can 

 cut down their expenditure on manures applied and 

 cultivations done to increase the fertility of the soil. 

 ami at the end of it all with reduced productivity, 

 and costs iv, ii more reduced, they can make their 

 farming (or ranching) pay. Going a stage further, 

 they can l:u larire fcreM c.f the less fertile arable 

 lands down to i_'ra<c. and in the- last resort they can, 

 if nifcs.a.-y. lay the hole country down to grass, and 

 English agriculture can become once more a 

 primitive pastoral industry. 



II.2Ii">. 1 10) All this can be done, step by step, as 

 Hy die tiite-i. but it is important to "remember 

 that it will riot bring disaster cither to the- farmer 

 or to the worker, ('arming can bo carried on 

 profitably even under tho extreme conditions 

 imagined above, and labour can be paid high wages 



at the same time. But it must be borne very 

 seriously in mind that in proportion as market 

 conditions force this policy upon the controllers of 

 the industry, so will production and employment be 

 reduced. Every successive change in the downward 

 direction will reduce the output of wealth from the 

 soil, and will reduce the number of the rural 

 population. Some of them, both farmers and 

 workers, will be crowded out, but it will not bring 

 ruin to the farmers nor destitution to the farm 

 workers that remain. 



11.296. (11) The National Farmers' Union feel, 

 therefore, that this question of the economic future 

 of agriculture is a matter more of political concern 

 than of industrial concern. Does the country need 

 the maximum production from the soil of the 

 country? Does the country need closer settlement 

 of its rural areas? As good citizens the members of 

 the National Farmers' Union would deplore the 

 establishment of conditions which made for low pro- 

 duction accompanied by a large measure of de- 

 population. As business men they are quite 

 prepared to meet these conditions and to adapt their 

 management to them. The repeal of the Corn 

 Production Act and a return to the unrestricted play 

 of the law of supply and demand, would not, taking 

 the long view, do injury to the farmer nor to the 

 workers as individuals; certain of the farmers would 

 adapt themselves to the new conditions in the ways 

 indicated above, and those of the workers who v ero 

 still employed would secure by collective bargaining 

 that which they now get through the Agricultural 

 Wages Board. But the nation would lose heavily 

 in output at a time when home production is the 

 thing most needed for national rehabiliation, and it 

 would lose in healthy manhood at a time when the 

 creation of an Al population is the concern of all 

 who have ita true welfare at heart. 



11.297. (12) The decision, then, as to what steps 

 should be taken in regard to the future development 

 of agriculture is one of political rather than of 

 industrial importance. The members of the Royal 

 Commission will have realised this obvious fact, and 

 it is of vital importance that the nation, as repre- 

 sented by His Majesty's Government, should also 

 face up to it, and at once. British agriculture 

 stands at the cross roads ; under the stimulating 

 influence of Lord Lee, when Director of Food Pro- 

 duction, English farming reached a level of output 

 during the War which this generation has never 

 known, but the War is won, and whilst war costs are 

 likely in a large measure to bo permanent, it can 

 only be a question of time before war markets break. 

 If it is the wish of the nation that the farmer should 

 maintain and develop his output, whilst, at the same 

 time, meeting the reasonable demands of labour, 

 the nation must see to it that when he has taken all 

 possible steps to organise his business, so that* 

 wasteful and inefficient methods are eliminated, he 

 can then get a fair return on his capital, having 

 regard to the vicissitudes to which agricultural 

 enterprise in peculiarly liable. It may be that by 

 some drastic reforms in our agricultural system, such 

 as by a great extension of the practice of 

 co-operation amongst farmers, or by the development, 

 on a largo scale, of what is sometimes called 

 "factory farming," or, at the other extreme, by a 

 wide increase in the number of small holdings, or 

 by each and all of these methods, agriculture can 

 face the possibility of a severe decline in prices 

 without the necessity for a reduction of output. On 

 the other hand it may be that production and em- 

 ployment in the future depend upon guaranteeing 

 to the farmers certain prices, on the principle of tho 

 Corn Production Act, for certain periods, and tho 

 actual figures being subject to revision, from time to 

 time, in the light of changing circumstances. AVe do 

 not know, but it is the expectation that the Royal 

 Commission will want to examine these questions aiid 

 the. National Kartners' Union are taking steps to 

 collect material in the hope that it may be of 

 assistance to the Commission in their work. 



/ . fiinrludcs the evide.nce-in-chief.] 



11,2!)*. N/V Wiin.im Ashley: The other members of 



the Commission will ask you more technical questions 



no doubt with regard to farming, but I should be 



glad if you would expand a little one or two of vour 



