MINUTES OF EVIDENCK. 



85 



12 August, 1919.] 



DR. E. J. RUSSELL. 



[Continued. 



1989. When you talk about a guaranteed price, 

 do you mean an effective guaranteed price- -a price 

 that will be in operation? As you know, the 

 guarantees under the Corn Production Act have not 

 been in operation? That is so. 



1990. When you are talking about a guaranteed 

 price in the future, are you thinking of a price 

 such as the present one which will not actually come 

 into operation or are you thinking of one that the 

 community will have to pay? I would rather look 

 upon it as a matter of sharing the risk. The farmer 

 is now spending money on a corn crop that he will 

 ell in 1921 and no man can tell him what price 

 he will get in 1921. At present he has to bear the 

 risk of all the money which he embarks in his farm, 

 and which in the case of our own farm is some- 

 thing like 18 per acre. That ie a very heavy 

 risk for a farmer to have to bear. Supposing you 

 could devise some means whereby that risk slo'uld 

 be shared by the community at large and not 1 orne 

 entirely by the farmer I think the farmer, ill that 

 case would much more cheerfully go ahead than he 

 does at present. It may be that an economic price 

 will effect that or some other system might be 

 devised ; but that is a business problem on which I am 

 not competent to advise. I cannot help thinking that 

 there is a solution of it along some such lines as 

 insurance. 



1991. There is no reason why the insurance com- 

 panies should not take that risk, is there? It is 

 possible that they would not 'care to do. it, but 

 methods have been devised for meeting other risks 

 that seem at least as serious. I think the problem 

 is one that wants solving. I do not think it ought 

 simply to be left as a problem which might be solved. 



1992. When you talk about the community sharing 

 the risk* do you moan that the community should 

 share in the farmer's losses if there are any, but 

 if it happened that in the year 1921 or 1922 prices 

 went up enormously the farmer should act all the 

 advantage of the high prices, the community merely 

 sharing in the risk of loss in the case of a reduction 

 of prke coming about? I imagine in :.ny system 

 of the sort the farmer would have to contribute 

 somehow or other. At present when he insures his 

 hay stack against fire, for example, he has to pay 

 go much by way of premium. If there is a firp he 

 gains! by his expenditure. If there is not a fire 

 he is that much out of pocket. I did not say 

 that the community should take all tbo risk, but 

 should share the risk that there should be some 

 method of contribution. 



1993. I can follow tr.i suggestion that the cf.m- 

 munity should share thp risk. What I do not follow 

 i whether they are to share in any extra profit that 

 may arrrue to the farmer? I think that is implied 

 in sharing the risk. After all, the risk cuts both 

 ways. 



1994. Mr. Athby. Your farm is a farm which is 

 worked at a profit, is it not? I .should not sav it 

 was primarily intended to be worked at a j-rofit. 

 If it were we should adjust our acreages to secure 

 the maximum profit from it, and we do not do that 

 as a rule. We should grow more potatoes and roots, 

 for example, than we do at present if we were 

 working with the primary point of view of profit. 



1995. Would the farmer farming under ordinary 

 circumstances for profit be rather more concerned 

 with the total profit from his farm, or we will ay 

 the greatest profit per acre over the whole of his farm, 

 rather than the profit he might get from any 

 particular crop in any given year? He would be 

 much more concerned with his total profit, but his 

 total profit after all is arrived at by adding up the 

 individual balances. I deal with that in para. 8. 

 You will notice thre that we have, for instance, a 

 cash balance on our wheat and our oats, and generally 

 on our barley, and we have a cash deficit on our roots 

 and potatoes and a cash balance on our clover. It is 

 obvious that by adjusting your acreage of cereals and 

 clover on the one hand and your roots on the other 

 that you can make them counterbalance or more than 

 counterbalance one another. That is how the farmer 

 would get out hn profits. 



26125 



1996. For general purposes would it not have been 

 ;in advantage if you had stated the total acreage 

 and the total cost and the total receipts, because as 

 the figures stand we cannot arrive at the average cost 

 or receipts over the whole 200 acres? I thought of 

 that, but the results would be misleading because, 

 as I have explained, the primary purpose of 

 this farm is not to make a profit, although every 

 item is carried out on financial lines. We should 

 have a different adjustment of our acreage of roots 

 and cereals if our object was to secure a pivlit. Avnat 

 we want to do it to get our land into a condition to 

 make experiments on. 



1997. I follow your point, but having given us 

 certain figures could you not in addition state the net 

 results? Could you not give us a table showing the 

 total cost in each year and the total acreage and the 

 average cost per acre of all crops, and the net profits ? 

 If it would be of any interest to the Commission 1 

 can have those figures taken out, and will do so with 

 pleasure. We have a large number of figures, and 

 any you like I will take out with great pleasure. 



1998. The Chairman : Will you be so kind as to give 

 us the acreage of each case? The acreage of each 

 year, because the acreage has varied in each year. 



1999. Yes, and also if you could give us, if you are 

 willing to do so, the net result of profit or loss for 

 each year ? Yes. All our figures are at your disposal. 

 I can let you have the audited balance-sheet if you 

 like for this actual farm. 



2000. If the audited balance-sheet shows the result 

 of each crop which I am not sure it will do we 

 should very much like to see it. But we leave you 

 to do the best you can, knowing that we want the 

 acreage and the average crop and the sales for each 

 of these years. You mention that your 1918 estimate 

 of costs was about 18 an acre for wheat? Yes, 

 that is the corrected estimate, allowing for the differ- 

 ence in variation of the land. I gave you two sets 

 of figures, one on an actual cash basis and the other, 

 in para. 2, taking into account the difference in the 

 variation of the state of the land. 



2001. I know that, but at the same time, if 18 or 

 18 10s. is the proper cost, that is what we want to 

 know. We do not want a figure which a commercial 

 firm does not budget on. For instance, if you have 

 to transfer 2.3 per cent, of your roots, or 15 per cent. 

 of your roots, to the debit of your wheat, clearly the 

 profit on your roots must be 15 per cent, less,, or the 

 loss must be 15 per cent. more. What the Commission 

 want, I am sure, is the result of each crop in each 

 year systematically arrived at so as to show the true 

 cost and the true income as against net cost and 

 the actual profit or the actual loss on each crop? 

 May I say that the true cost is really a conventional 

 figure, because one has to assume the amount that 

 has to be carried over. The amount I have assumed 

 is 15 per cent. 



2002. Whatever you assume as a practical man w 

 would recognise as necessary? I do not know 

 that every farmer would agree with my figure of 15 

 per cent. I could not defend my 15 per cent, as 

 against somebody else's 17 per cent, or 13 per cent 

 It is simply an assumption. One has to draw the line 

 somewhere. 



2003. Mr. Ashby : Will you prepare a Table stating 

 the total cost in each year, the total acreage in each 

 year, and the average results per acre of all crops fol- 

 lowing Table 1? Do you mean total cost, or total ex- 

 penditure in each year? Table 1 is expenditure. 



2004. The same figures as enter into these items 

 set out in Table 1? Yes. 



2005. Chairman: The expenditure? Yes, the total 

 expenditure in each year, and the total acreage each 

 year, and each crop. I will get that out. 



2006. And the profit and loss results on each crop 

 in each year? Yes; in other words, the Auditor's 

 Balance Sheet. In the case of the Auditor's Balance 

 Sheet we have only one copy, and if it is sent can it 

 be copied and returned? 



2007. Yes. If you will kindly send it to the Secre- 

 taries they will see to that? Yes, that shall be done. 



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