56 



KOYAI, COMMISSION ON AGKICULTITKK. 



MK. H. G. UOWELL, F.U.A. 



' . ... \\.:n..iit labouring the iu<> 



1 want to go again into thu ijiu*>tion ni tlu< im tin*! 

 <>t tuluiug loud* consumed on a holding ii the 

 purpose oi producing something else. You take the 

 new which u common to all accounting in busineM, 

 thai tin- c-t of production i- ti proper baais of 

 valuation f Yes. 



127U. But 1 think you recognise for certain pur- 

 pOMt a producer must un e.-tigato thu actual costs of 

 a particular Department <>t his production in a 

 different way P Yes. 



1271. That is, if a man is to arrive at a division. 

 tor example, whether he is going to continue to be a 

 milk producer, he must calculate the cost of his milk 

 production by taking into account, at what he could 

 ell the farm produce which he is going to use in 

 milk production P It would be easier to ascertain 

 that fact if he had adopted the market value basis. 



1272. That is to say, what you would 'consider in 

 deciding to undertake this class of production would 

 be, whether it would pay him better to use his home 

 produced materials in milk production or to sell 

 them if they were saleable. That would be his alter- 

 native P Yes. 



1273. If the State is setting up prices for the pur 

 pose of guiding production into certain channels, 

 that would exactly correspond to the individual's 

 calculation P Yes. 



1274. And therefore, eo far as that particular 

 matter goes for that purpose, that would be thp way 

 in which the State would assess those home-produced 

 foods \\hich were to be used in that now das- of pro- 

 duction. You said it would be strictly on the same 

 lines? Yes. 



1276. You have got a certain number of existing 

 cost accounts as distinct from the accounts for Income 

 Tax purposes, have not you? Yes, a few. 



1276. You would regard it, would not you. as 

 necessary to the best system of management that 

 farmers in some way should keep costings accounts ?- 

 Yes, I do. 



1277. You would regard it as part of good manage- 

 ment? Y. 



1278. Therefore it is not unreasonable to 



that the farmer, who managed well in that respect, 

 would be a good farmer generally:- No. n is not un- 

 reasonable. 



1279. Therefore probably in getting existing cost- 

 ings accounts, you are getting the costings accounts 

 of the best farmers rather than the average? Yes, 

 that is to. 



1280. And you are getting none of the worst, I 

 presume? No. 



1281. Therefore they would not present you with 

 any baais on which you could calculate average or 

 maximum costs of production. They would give you 

 the minimum costs of production only, would not 

 thoy? Yes, these existing accounts would. They are 

 too few altogether to build any generalisation on. 



1982. With regard to the farmers with small hold 

 ings, I do not mean in any technical or legal sense, 

 but say farms of 50 or 100 acres, do you have COM in - . 

 accounts from any of those? No, not so far. 



' It would be rather difficult, would it not, to 

 get full costings accounts of these where the labour 

 is family labour and there is no fixed payment of 

 wages?- '-Yen, it would bo difficult. 



You would regard this as rather lying out- 

 -i.l.. \our iTnostigntion, would not you? Not nccos- 

 itarily. 



1285. I mean to say. you would find it very difficult 

 to get anything to investigate? -It would be difficult 

 to get the coats ; but it would bo very easy to get the 

 ordinary financial account from that class of farmer 

 It would bo easy to get that information. 



1286. But very difficult to get real costings? -Yes. 



1287. OosU of production vary enormously, of 

 oonrw. do not they? Tfcey do in most industries. 



12*8. You have the two varying factors in agricul- 

 ture the different productiveness of different dis- 

 tricts and the different costs of the working of differ- 

 ent districts? Ye*. 



1289. Not necessarily corresponding? No. 



I-"HJ. Then you have great varieties of seasons ? 

 Yes. 



So that taking into account tho whole of the 

 profit and low and the great variations, there would 

 be a very largo margin of error in calculating cost*. 

 would not there? I do not know about a very large 

 margin ; there would be .1 margin of error. 1 should 

 say certainly a larger margin than in other industries 

 generally. But we must remember that other in- 

 dustries also have their difficulties as regards costings; 

 and that while agriculture has a good many of these 

 difficulties specially emphasised, yet tho difficulties of 

 getting exact- costs do not apply solely to ngricultur >. 



1292. But is it not tho case that the-e difficulties 

 in agriculture are additional to the difficulties whidi 

 beset other industries in accounting? In one or two 

 points, yes; in other points, no. 



1293. But there are certain difficulties which are 

 special to agriculture in addition to those which are 

 common to other industries? As regards yield and 

 wo-athor I should say yes. But take your out-of-door 

 contractor or public works contractor. Hi also is 

 largely at the mercy of the weather in getting out 

 hia work, especially in tho winter. Ho get* his work 

 held up without end sometimes. So that I say 

 whore;i-- agriculture ie affected by the weather oilier 

 industries are also affected, but generally speaking 

 to a I. --,! extent tlian ngricultir 



1201. But as regards the contractor to which you 

 have referred, in working out his costs it is calculat- 

 ing on a- definitely ascertained set of physical condi- 

 tions, soil, and so on, whereas in agriculture Nature 

 varies these conditions lor you, and tho costing* 

 officer, whoever ho may be, has himself to make 

 allowance for a great variety of conditions? But the 

 contractor cannot cost as regards future weather dur- 

 ing the course of his contract. 



1295. I do not mean weather? But that i.s an im- 

 portant matter. Take a long contract which takes 

 three or four years to fulfil, an immense factor in 

 that is the weather. 



1296. But there are other things which nro addi- 

 tional to that in the case of agriculture which cannot 

 bo taken into account in advancer That, is -o. On 

 tho other hand, there aro special conditions pertain- 

 ing to other industries that do not appertain to agri- 

 culture. 



1297. Such as? Such as the incidence of, shall I 

 say, overhead expenses. With a liig industrial concern 

 with a lot of plant and departments and one thing 

 and another, tne question of tho allocations over the 

 respective jobs which may be in hand at any time. 

 of these overhead expenses is a very difficult matter 

 indeed, and is very frequently the biggest of the 

 items in the cost. 



f'liniriiuin: Is it at all important that we should 

 discutn what relates to tin- other indu-P 



12!)S. Iti . Hom/liix: I did not raise the point, hut f 

 did not wish to interrupt the Witness:-- I was merely 

 trying to bring out that wherea-. there ate difficulties 

 in agriculture them aro also difficulties in other 

 industries. 



1299. But if. U >"ii have said, there is .% large 

 margin of error, that means you will require a, very 

 largo number of instance* in order to eliminate it?- 



1300. So that it really is a very large investigation 

 to get at anything reliable and sfablo in tho way <,f 

 costings? It has lie.-n done on a \ery large to 

 regards number in the Tinted States for many 

 past. 



1301. And you think that is necessary to have, a 

 largo number of eases over a number of ye: 

 order really to get trustworthy results-?- -T was going 

 to say that they have evolved means of conducting .1 



