MINUTES OF EVIDENCE. 



121 



19 August, 1919 ] 



SIR THOMAS H. MIDDLETON, K.B.B., C.B. 



{Continued. 



the financial risks incurred in tillage farming, the 

 Commission may wish to consider whether anything 

 (apart from guaranteeing corn prices) could be done 

 to alter the economic prospect of tillage farming as 

 compared with grass farming. 



3001. (18) Various methods of altering the balance 

 so as to improve the relative prospects of tillage farm- 

 ing might be suggested, e.g., (a) The principle of 

 abatements in Income Tax now made in certain cases 

 for dependents might be extended to land. If an 

 occupier of land were allowed to deduct from the gross 

 rent a proportion corresponding to the whole or part 

 of the actual area under the plough there would be a 

 great incentive to tillage on all large holdings, e.g., a 

 400-acre farm, half in tillage, rented at 600 would 

 now be assessed for Income Tax under Schedule B ac 

 1,200 (less the value of cottages). If a proportion ol 

 the rent equal to the whole of the tillage land might 

 be deducted, the assessable value would be 600 ; and 

 if a proportion equal to two-thirds of the tillage, 

 800. 



3002. Similarly, in electing to be assessed under 

 Schedule D, an abatement might be allowed in resptct 

 of tillage land. 



3003'. (b) If national necessity calls for heavier 

 taxation, and the agricultural industry has to bear 

 its share, the principle of " earned " and " un- 

 earned " Income Tax might be applied to tillage land 

 and grass respectively. 



3004. (c) If changes are made in Agricultural 

 Rating, there might be a similar discrimination in 

 favour of tillage. 



3005. (d) These principles should be extended to 

 cover the case of the landowner, so that his taxation 

 on " used " tillage land should I* less than on 

 " unused " grass. 



Properly applied, the methods suggested under (c) 

 and (d) would serve as a stimulus to tillage on the 

 smaller farms of which the occupiers might not be 

 affected by Income Tax. 



To prevent any administrative difficulties which 

 might arise if discrimination were made in favour of 

 " arable " land, I suggest that " grass " might in- 

 clude temporary grass and clover, so that abatements 

 would be on crops other than grass, clover, or 

 " seeda." 



3006. (19) I put forward these suggestions (not 

 recommendations) for the consideration of the Com- 



because: 



(1) In my opinion it is not equitable that the 

 farmer, who by his system of husbandry 

 provides a large fund for wages and a large 

 supply of food, who substantially assists 

 the nation's balance of trade, and who, in 

 doing so, has admittedly to incur consider- 

 able risks, should be taxed at the same rate 

 as tho farmer who adopts system equally 

 or more advantageous to himself, but of far 

 less value to the community. 



(2) I think it improbable that any guarantee of 

 prices likely to be obtained by the farmer 

 would in itself secure that extension of 

 our tillage area which is desirable in the 

 national interests. 



3<XJ7. (20) The principle of " abatement " might be 

 applied to certain other very desirable agricultural 

 operations which, if popular, would certainly add 

 greatly to the national wealth, though they might 

 fail in a considerable percentage of cases to benefit 

 the particular individual executing them. I have in 

 view Drainage and Liming. An abatement from the 

 gross assessable value of a sum equal to twice the 

 actual expenditure would do much to stimulate these 

 practices. The relief should be given to owners and 

 occupiers and in respect of all agricultural land. 



[This concludes the. evidence-in-chief.'} 



3008. Chun inrni : You have been kind enough to 

 send us certain statements. Will you allow me to put 

 them in as evidence without reading them? I think 

 it might save time if we went through them para- 

 graph by paragraph. 



3009. If you will allow me to put them in at the 

 moment, I will give you an opportunity of going 

 through them paragraph by paragraph if, after the 

 examination has taken place, you find it necessary to 

 do so. 



Mr. Smith : Might" I suggest, with respect, that, 

 as it has been suggested, we might elaborate just 

 shortly one or two of these paragraphs ; it might save 

 time in the end. We have had very little time to 

 examine this precis. We were very buoy when we 

 received it. 



3010. Chairman: If you wish it, certainly. Sir 

 Thomas, wojuld you kindly do as you suggest elabo- 

 rate these memoranda as you think well? In the first 

 place, I have endeavoured to make an estimate of the 

 pre-war cost of growing wheat and producing meat, 

 comparing that with the cost immediately after the 

 war. I recognise that estimates of this sort are very 

 much less desira-ble than an analysis of, say, 1,000 farm 

 accounts. But I think that they are probably as 

 reliable as the examination of a dozen or even fifty 

 farm accounts would be, because one's experience in 

 dealing with farming figures is this, that there is a 

 very wide variation in cost on individual farms, and 

 that in order to get anything like an average figure 

 one would have to examine the working of a great 

 many farms. I think, therefore, that this method 

 may be defended as one which is in effect an attempt 

 to put into figures the opinions one forms from the 

 prices and other factors which one has got to take into 

 account in estimating costs of production. 



I will take, first of all, the case of wheat produc- 

 tion. The detailed estimate for the cost of wheat pro- 

 duction is in Appendix A. I shall not go through 

 details of the estimate. I shall be ready to answer 

 any questions that may be put on these details; but 

 I bring out from Appendix A that, under the condi- 

 tions assumed, which are those of the Eastern Coun- 

 ties, a strong loam soil, and a crop of wheat after 

 mangolds, the probable cost of growing before the war 

 was 7 9e. per acre. I have taken the probable yield at 

 4 quarters on land of that description, and I bring 

 out a net cost per quarter of 33s. Id. In examining 

 that estimate the criticism that occurs to myself is that 

 under the conditions supposed the crop would probably 

 be nearer 38 bushels than 36 per acre; and 

 therefore my cost is a little high on that ground. But 

 assuming the same conditions after the war, the cost 

 of the same crop would be increased to 59s. 2d. pet- 

 quarter. The selling price in the 5 years before the 

 war was 33s. 4d. per 480 Ibe., or 35s. per 504 Ibs. So 

 that if my comparison is correct, a corresponding 

 price in the next 5 years, assuming the cost to remain 

 the same, would be something like 62s. 6d. per 

 quarter of 504 Ibs. Then I put this question : Would 

 this average price without any guarantee suffice to 

 maintain the 1909-14 area of wheat, say 1,800,000 

 acres, in the United Kingdom; and my answer is, No. 

 But I do not think that the reduction, assuming that 

 to be the average price and assuming that there were 

 no guarantee, would be substantial unless we 

 happened in the next 5 years to meet with two wet 

 seasons in succession. In that case we would have a 

 very substantial reduction in area as compared with 

 the pre-war period. 



Then I ask : Would a guarantee of some such figure 

 as 60s. per 480 Ibs. maintain production at the 1909- 

 13 level 9 In my opinion it would, and would increase 

 the production of wheat Milist.uitially. I base my 

 opinion on the figures which I have set out further 

 down in the paragraph, figures which point' to the 

 fact that there is a very large area of land at present 

 in the United Kingdom which may be described as 

 on the margin of wheat cultivation. A little improve- 

 ment would bring in a very substantial area, and 

 small fall would reduce it'. I venture to make an 

 estimate that if we had this guarantee, we should 

 grow in England and Wales between 2,200,000 and 

 2,500,000 acres of wheat, and from 6,500,000 to 

 6,700,000 acres of total corn. My view is that even if 

 market prices were to reach and to remain for som 

 time at a level of 80s. per quarter, we should b* 

 unlikely to get back to the 1871-75 acreages of wheat 

 and other corn crops; that is to say, hack to a ITP' 

 of 3.500,000 a-cres of wheat' and S,000,000 acres of tots' 



