98 



HOYAI. 



'.\ A(, liHTLTl'KK. 



1919.] 



SIR WILLIAM H. BBVEKIDQK, K.C.B. 



.iwd. 



3386 Any other besides labour? I do not know 

 that there are others besides that. I think AM ;.. 

 iiuito sufficient for me to distinguish the CM* o* i 

 from that of other product. ; but if you ask mo why I 

 suEgest that n guarant.v might be tetfMH for milk, 

 even though it is n.,i de,nal,le l.r ,,t her reasons, 

 approaching it from anothor standpoint, 1 should say 

 that milk is an essential which .an only be produced 

 at home, and therefore it is moro important to keep 

 up the output of milk than of other agricultural prt 



U 3386. Mr. Smith: You say you make an exception 

 in regard to milk? Yes. 



8887. Is that because you feel it is necessary to 

 hare a guaranteed supply for the nation? Yes. 



8388. Not because of anything you have come across 

 to far as cost* are concerned which would make it 

 essential? I do not understand 



3389 I understand your department has made con- 

 siderable inquiries into these questions with a view 

 to fixing a price. I was wondering whether in your 

 investigations any difficulty in the cost of production 

 had brought you to that conclusion, apart from t 

 fact of the necessity of having an adequate supply . 

 for the nation from the point of view of the healU 

 of the people. The two questions are rather distinct.- 

 Do you mean is there an unnecessary cost in pro- 

 duction ? 



3390. I wondered whether your investigations had 

 shown that the cost of milk production was such that 

 in itself it needed a guarantee to get the necessary 

 quantity? No; I do not know that the cost of pro- 

 duction involves a guarantee. It might if it were 

 subject to foreign competition. Milk is not subject to 

 foreign competition ; so that I do not think you need 

 guarantee a price to the home producer in order to 

 avoid the industry being ruined by foreign competi- 

 tion. 



2391. I suppose your department made rather ex- 

 tensive inquiries in regard to the matter of milk' 

 Yes, a good many. 



2392. Did you find a very great variation in the 

 cost of production? Immense variation in the esti- 

 mates of the cost of production. 



2393. Do I understand from that that you were not 

 able to get any exact evidence: that it was more a 

 matter of guess work on the part of those concerned ? 

 I think for most farmers it is guess work, because 

 most farmers do not keep books. On the other hand, 

 some do keep books and yon get accurate results, but 

 you do not know whetheY they are typical. That is 

 one of the outstanding difficulties of costing. 



2394. Where the accounts were kept which in your 

 judgment might be taken as accurate, _was there any 

 great variation in the cost of production? Yes, cer- 

 tainly. 



2395. Could you give us any idea of the extent? 

 No. I would rather give you a definite statement 

 as to the results of our inquiries later. 



2396. Could you recall any special circumstance 

 which contributed to the extra cost or the reduced 

 cost of the production ?- Of course the cost of produc- 

 tion of milk, as one works it out, varies immensely 

 according to whether you attribute to the feeding 

 stuffs used produced by the farmer himself, their 

 market price or their cost of production price. That 

 i nno of the big elements. Then T find the farmers 

 getting apparently vorv different yields from their 

 cows, which of course directly affects the cost of pro- 

 duction. But quite generally. T think there are so 

 few reallv ncctirnte estimates tint one cannot speak 

 of any scientific costing in relation to milk at all. 



2397. In regard to the yields, did you come across 

 any evidence as to whether milk tests were being kept 

 and how extensive was the keeping of milk records 

 in the industry?- -Yes. I have come across, I think 

 it was, an estimate before the war. I think it was 

 in connection with the Reading University College, 

 but T am not sure: but somewhere tliere have been 

 mode verv elaborate estimates, and there they _<>* 

 results of yield far above what the generality of 

 farmers would admit. 



239. Do you think the investigations of your 

 Department 'show in the ease* where milk records are 

 kept, that the yield would bo higher per cow than on 

 farm* when* no records are kept? I have no doubt 



that is the case, because that loads gradually to the 

 weeding out of bad milkers. 



8399. Did you come across any instance of where 

 the lack of transport was a difficulty adding to cost, 

 which might be obviated by development in that 

 respect : I have no doubt there are such cases, but 1 

 have not got them in mind. 1 have not made a 

 special study of milk costs as yet before coming hcic. 



3400. Tho'difficulty of price fixing is the absence of 

 precise figures. 1 suppose we may take it that the 

 average farmers do not keep books or accounts which 

 enable the cost of production to be in any way 

 accurately detenu ined:-- -That is so. 



.Mill. Have y<>u anywhere come across a farm w 

 they kept booka. so that the balance sheet of the faun 

 was available? I have not done this costing myseU 



Jlitf. I did not know whether the investigations 

 may have proceeded on those line-, and you would 

 have the information in your Department:' 1 should 

 have to inquire. 



2403. One would naturally conclude that your De- 

 partment, before determining the price of milk which 

 was to be fixed, would have some evidence as to what 

 it cost to produce ; and I was wondering whether you 

 could give us any of that evidence, and whether i 

 would be taken from balance sheets or what channel 

 you would obtain it through. 



2404. r/niiYmuii: Or was it a process of bargaining 

 between you and the producer? I see, for instaace. 

 in your statement, that the milkman's price was fixed 

 in the winter of 1918 by Lord Rhondda after a dis- 

 cussion between representatives of the producers 

 demanding 2s. 6d. and the consumers demanding 2s. 

 That looks like splitting the difference? It looks 

 very like it. 



3405. Mr. Smith : Can you tell me, as the head of 

 the Department, whether you really pretended to bar- 

 gain upon absolute facts of costs of production, or 

 whether you intended to bargain as between the 

 haggling "market and what the buyer was willing 

 to pay and the seller was willing to sell? 

 Generally speaking, I think all our prices have 

 really been fixed by a sort of bargain and without 

 scientific costing. We fixed prices because we hail t" 

 You will see that now when wo come to this next 

 winter's prices we have got three or four alternative 

 methods upon which we are proceeding and we are 

 bargaining. Personally, I am inclined to think we 

 have suggested a method which might be of per- 

 manent value just recently in the way of fixing prices 

 for milk and other articles; that is by comparison of 

 the present costs with pre-war costs. 1 do not believe 

 that until you get agriculture absolutely stan- 

 dardised (which, of course, you never will do) you 

 can really build up a price accurately on taking the 

 items in" the cost of production. If you apply a 

 theoretical daily ration, and say it costs so much n id 

 r\ cow must eat so much every day. you will find that 

 ration does not suit perhaps half or throe-quartern 

 of the farmers in the country ; that some give more 

 and some give less, and you get a corresponding varia- 

 tion in the yield. I do not want to object altogether 

 to a cost of production method based on a theoretical 

 or average ration, because I think that is a useiul 

 second method ; but I doubt whether it will ever, or 

 certainly not for a long time to come, servo as the 

 real basis. 



2406. I see in (a), (b), (r) and (<l). under the 

 heading " Difficulties of Price Fixing in Agricul- 

 ture," the whole of that seems to suggest that there 

 was an absence of anything in the way of definite 

 data to go on in the details of farm administration? 



Yes. 



2407. There is an absence of this, and, hearing on 

 that, a disagreement you start with, which all scorns 

 to point to the fact that you could not get any definite 

 evidence from the farmers:' That is so: I should like 

 specially to refer to what I mention there. That is 

 the He-port of the Potato Commission. 1 may venture 

 to read it because it is very appropriate. This was an 

 independent Commission which tried to fix the price 

 of potatoes, and ultimately did it. 1 believe, by a 

 syitem of estimating on qniM general ground'-. What 

 it said was: " We were everywhere impressed by the 

 general ignorance of growers as to their cost of pro- 

 duction. It is obvious that in the majority of easel 

 farmers have never before considered the question 



