MINUTES OF EVIDENCE. 



5 Atiij'i*!, 1919.] 



SIK DANIEL HALL, K.C.B., F.B.S. 



[Continued. 



had the kind of feeling just before the war that we 

 were seeing the end very much of a period of 

 lowest price agricultural development. Country 

 after country had produced cheap wheat as a 

 means of clearing (the country and of breaking 

 up the land and getting it under cultivation, 

 and was then going out of wheat. You saw the wheat 

 zone go sweeping across the Argentine. It was the 

 means by which the new countrv was reclaimed. 

 One saw the wheat belt in the same wy 

 used as the means of breaking in parts of dry 

 land in Australia. We seemed to be nearing the 

 end of that expansion. There wore certain unknown 

 factors. Siberia was an absolutely unknown factor ; 

 but we were certainly nearing the end of the un- 

 limited supplies. Again one of the characteristic 

 features of the situation two or three years before 

 the war was the way the groat [Kicking houses were 

 trying all over the world to get freeh supplies of 

 meat. They were not able to meet their demand. 

 What we do not know, and what I say is the great 

 doubtful factor in the situation about prices in the 

 future, is the purchasing power of the peoples and 

 how far that has been impaired on the one hand by 

 the destruction wrought by the war. and on the 

 other hand increased by the higher rates of 

 .wages perhaps real rates of wages which have come 

 into being. We see a change amongst our own people, 

 for instance. There will be amongst our own 

 people greater demands for meat and milk, and for 

 the better class of vegetables per head of the popula- 

 tion in the future than there ever have been in the 

 past. You can count confidently on that greater de- 

 mand. What I do not know is, whether there is going 

 to be the money to pay for it; and that is just the 

 uncertain factor in the world's situation. 



311. Does not the opening up of new back lands 

 very largely depend upon railway development; and 

 is not it possible to gauge the extent to which that 

 has been retarded during the war? That, no doubt, 

 is a factor; but I do not see the immense amount of 

 new back land in the world left to be opened up, of 

 the kind that is needed to grow our temperate agricul- 

 tural produce. 



312. Would you, on the whole, agree with this 

 statement which was made by Lord Ernie, then Mr. 

 Prothero, in 1916, in evidence before the Depart- 

 mental Committee: " Anybody who looks far ahead 

 will see that prices must rise to a remunerative level 

 for the farmer " ? Was he speaking of world's prices 

 when he said prices must rise? 



313. I gather BO? He was meaning that the prices 

 would ri 



314. Yes. He goes on : " The American competi- 

 tion, for example, is of course decreasing in force. 



IM tin' American now has t<i adopt our plan of 

 raising produce. He has to use more fertilisers, and 

 it is more expensive for him to raise it"? Yes; I 

 should share in that opinion, that the trend was up- 

 wards. We were nearing a limit of this big flood of 

 stuff coming in cheap. There is no doubt that in the 

 'nineties wheat was sent into this country below any- 

 thing you could call the costs of production. 



315. Do you consider it would be at all possible to 

 estimate what would be the effect if market prices 

 were left to govern agricultural operations unim- 

 peded? What would be the probable effect on the in- 

 tensity of cultivation in this country, especially of the 

 arable area and the area under corn, and, secondly, 

 on the number of persons employed in agriculture? 

 You see I am myself a believer in the future con- 

 tinuance of good prices. But, as I say, there is an 

 enormous element of speculation about that ; and 

 then- is not the slightest doubt at all that, in the 

 minds of the agricultural community, there is a 

 great feeling of uncertainty and doubt. They 

 are holding back to see a little bit how the 

 position is going to be. We want every factor 

 we possibly can get that will tend to stimulate 

 men towards production and towards starting up 

 tho industry on the best scale; and I think simply 

 to s;iy to the farmer, " Conditions shall be free. You 

 will take your risk and you will get good prices" that 

 I consifler would have a danger-oiii effort upon produc- 

 tion. There is such a temptation at the present time 



251 2f, 



to a man to realise the capital he has in his business 

 and go out of it, and sit on it until the situation 

 looks a little more stable. That is what we want to 

 avoid. We want these men to step in and 

 increase their farming. So we say : " Give them some 

 measure of security for the future." Do not say, 

 " We will leave you in this whirlpool that is resulting 

 at the present time from all these unforeseen forces," 

 but say, " We will not leave you just to the sport 

 of these currents, but we will give you some security, 

 and that will encourage you to start up your 

 business." 



316. Have you considered the possibility of this 

 insecurity of fluctuating prices being met, not by 

 State guarantees, but by business arrangements 

 between farmers and insurance companies, or by some 



form of compulsory contributory insurance? No; I 



certainly have not reviewed that way of dealing with 

 the industry. You see the State is in it at the present 

 time. The State will come in and lop oft' the farmers' 

 profits by maximum prices. It insists on con- 

 tinuing to do so now, this year, after the war is over. 



317. You have spoken in your evidence-in-chief of 

 certain agricultural undertakings, such as those of 

 the Food Production Department, providing no 

 proper evidence of the real cost of production in 

 agriculture. Would you agree that the financial 

 results of farming during the war, on an average, 

 could not be taken as an index of the real cost of 

 production in agriculture, and that this cost of pro- 

 duction might be considerably reduced by changes 

 in the size of farms and by a levelling up of farming 

 efficiency and method? The reason that I say these 

 agricultural undertakings, say of the Food Produc- 

 tion Department, do not give evidence of the real 

 cost of production is that they were very special 

 enterprises, not founded on an economic basis, but 

 done to get the land into cultivation. For 

 instance, you would have a derelict farm. Perhaps 

 the tenant was left in possession of the farmhouse 

 because there was nowhere for him to go. It might 

 be an old man past his work, and it would be cruel 

 to turn him away. The land was taken away and 

 was given to a man two or three miles off to farm. 

 He brought his horses, men, and so forth, and culti- 

 vated the land, and we got the crops off it. The 

 operations did not afford any guide to what that 

 farm ought to have cost to work. First of all, there 

 was all the cleaning and work of getting the place 

 straight, and then there were these facts, that it was 

 farmed at a distance and under physical disadvan- 

 tages which would not prevail if it were a proper 

 self-contained farm with its occupier engaged in 

 the normal course of his operations. As to the second 

 part of your question, whether the financial results 

 of present day farming are unreliable as an index to 

 the real cost of production, do noti you mean ideal 

 costs of production? Is not the real cost of produc- 

 tion the actual prevailing average? 



318. I would say the best possible, rather than the 

 ideal? I will admit that. 



319. But meaning by best possible that which 

 could be achieved if, for instance, the size of farms 

 was changed? Possibly the size. One must admit 

 it is conceivable with better farming than prevails 

 on the average. 



320. Is there not a danger that guaranteed prices 

 fixed so as to secure the income of the existing 

 farmers and the profitableness of the existing farms 

 might prevent, or hinder, improvements, either in 

 the form of the supersession of the least efficient 

 farmers by the more efficient, or in the way of adopt- 

 ing a more economic unit of production? I mean if 

 we take the costs of production on an average 300- 

 acre farm, and guarantee prices which will make that 

 farm profitable, may we not hinder a valuable 

 economic tendency to develop a more efficient unit of 

 production, say, a 1.000-acre farm, with a greater 

 use of machinery? There are two points there. We 

 are not guaranteeing the actual price to be paid. I 

 believe it is mischievous for the State to guarantee 

 the actual price ; but whore the market is still at 

 play, I do not see that so much evil results. But 

 from this point of view does pressure on the industry 



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