MINUTES OF EVIDENCE. 



123 



19 Auguit, 1919.] 



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



[Continued. 



increased in about the same degree. I have not 

 actually estimated it for different conditions, but it 

 is in about the same degree as the increase of food 

 production. 



Now, Sir, I want to draw your attention to a 

 point in connection with farming capital. In com- 

 parison with the gross value of the crops which it 

 produces, the capital at the disposal of the tillage 

 farmer is always very small indeed ; and thus, if you 

 have two or three bad seasons in a rotation of crops, 

 you may have a sum equal to the whole capital value 

 of the farm disappear because of the effect of these 

 seasons on gross production. I conclude, therefore, 

 that it is a fortunate thing for the nation when tillage 

 farmers have a run of good years and make high 

 profits. 1 base my belief, not regarding the subject 

 from the farmer's own point of view, but knowing 

 what I do of the character and tendencies of the 

 farmer. The farmer is close-fisted, and it is a good 

 thing for the nation that he is. When he makes 

 profits he does not squander them. As a rule, these 

 profits go into the improvement of his farm. A very 

 great many of our land improvers have improved their 

 land at the expense of themselves and of their heirs ; 

 but it is undoubted, 1 think, that they have done so 

 in the national interest, and that the nation has 

 benefited thereby. In considering the profits from 

 farming, it is necessary to even out the profits over 

 a long life ; and if you do so and go back to the agri- 

 cultural history of the past .50 years, or, if you like, 

 the past 100 jears, you will find that few farmers die 

 rich. If a man maintains his holding free from debt 

 and has made a hving on his land, I do not think 

 that the average man has done more. There are, of 

 course, many capable farmers who have made fortunes 

 out of farming. But we must now think of the 

 average of the 200,000 farmery or thereabouts who 

 hold land in holdings of from 20 to 30 acres and 

 upwards. 



Now I want to say a word for the development of 

 ' small farms. I think the economic position of agri- 

 culture would be improved by the development of 

 small farms up to, say, 100 acres in area at the ex- 

 pense of intermediate holdings from 100 to 300 acres 

 in size. The size of the holding should be adapted to 

 the area which can be worked by one pair of horses. 

 That, of course, is obvious. One hears a great deal 

 about the non-productive character of the small hold- 

 ings ; but I think if that non-productive character is 

 traced to its cause you will generally find that the 

 cause is that the holding is not an economic unit. 



It is a much more difficult thing to make a small 

 holding an economic unit than it is in the case of a 

 big holding. You can lay down a little more grass 

 or plough a little extra grass on a 600 to 600 acre 

 holding so as to employ hands fully. But a small 

 farmer when he enters upon the land has got to take 

 what he gets ; there is no scope for change in the farm, 

 and it is that which handicaps so many of our small 

 farmers in this country. Then I think" it is a matter 

 of observation that very many of the smaller farmers 

 do not occnpy, to say the least, the best land in the 

 districts in *-hioh they are farming. 



So far as I can forecast the future, it seems to me 

 that the higher wages now ruling are likely to increase 

 the demand for small holdings. Some, of course, take 

 the opposite view and point out that in the past the 

 labourers in those counties which have paid low wages 

 have on the whole demanded small holdings to a 

 greater extent than those in counties paying higher 

 rates of wages. I am not, however, thinking so much 

 of the small market garden holding as I am of 

 the small farmer : and it seems to me that for the 

 enterprising agricultural labourer who will be able in 

 the future, especially if several members of his family 

 are working with him on the land, to save a con- 

 siderable sum from his earnings a small farm of his 

 own is likely to prove attractive ; and personally I 

 think that it would be in the interests of the economic 

 development of agriculture that provision should !>< 

 rnarlr for tin' supply of holdings for men of the type 

 I have in view. 



With a view to giving some precision to the argu- 

 ment I havo developed, I have made an estimate 



that if one man in ten employed in agriculture in 

 England and Wales looked forward to settling on 

 his land for one-third of his life-time, and if his 

 children, like himself, began work as farm workers, 

 some 40,000 additional holdings would be required, and 

 in order to provide for these and also to supply hold- 

 ings for the men whose farms were broken up in order 

 to make small farms, it would be necessary to increase 

 the total number of our holdings by something like 

 55,000. I have shown in the summary of my evidence 

 how these holdings would he distributed as compared 

 with the holdings in England and Wales in 1914. The 

 difference is, that one would increase the number 

 of holdings between 20 and 100 acres from 137,000 

 to about 192,000. One would decrease the number 

 between 100 and 300 acres from 69,000 to something 

 like 55,000 ; while the holdings over 300 acres, I think, 

 should remain as they are, because for economic 

 working there is no doubt that the holding of over 

 300 acres is a more profitable one than the average 

 holding between 100 and 300 acres. 



Now, Sir, I proceed to questions of policy, and 

 possibly I am travelling outside the sphere which 

 you have mapped out for the consideration of this 

 Commission. I ask this question: In view of the 

 large area of land of England and Wales which 

 belongs to the class referred to as " intermediate," of 

 the much greater value of tillage land than grass 

 land to the nation, and of the financial risks incurred 

 in tillage farming, the Commission may wish to con- 

 sider whether anything (apart from guaranteeing corn 

 prices) could be done to alter the economic prospect 

 of tillage farming as compared with grass farming. 

 I have put forward in the remaining paragraphs of 

 my precis a few crude suggestions. I put them for- 

 ward with some hesitation as they are outside my own 

 particular experience ; but it does seem to me that 

 there are various methods of altering the balance 

 which might be suggested. 



First, I suggest that the principle of abatement in 

 the Income Tax now made in certain cases for de- 

 pendents 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. If 

 national necessity calls for heavier taxation, and the 

 agricultural industry has to bear its share, the 

 principle of " earned " and " unearned " Income 

 Tax might be applied to tillage land and grass land 

 respectively. That is to say, if additional taxation 

 is to be imposed, I would first place the taxation on 

 the grass land which I regard as parallel to the case 

 of the " unearned " income, although it is admitted 

 that the income from grass land is " earned." The 

 amount of work, the amount of risk that is necessary 

 to earn an income from tillage land is, however, so 

 much greater than the risk and the labour required to 

 earn an income from grass land that 1 think there 

 is room for discrimination. If changes are made in 

 Agricultural Rating, there might be a similar dis- 

 crimination in favour of tillage. I would like to 

 extend these principles to cover the case of the land- 

 owner, so that his taxation on " used " tillage land 

 should be less than on relatively " unused " grass 

 land Properly applied, such methods of assessment 

 as the last two 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 adminis- 

 trative difficulties, I suggest that " Grass" might in- 

 clude temporary grass and clover, so that abatements 

 would be on crops other than grass, clover, or seeds. 



I put forward those suggestions for consideration 

 for two reasons : (1) In my opinion, it is not equitable 

 that the farmer who by his system of husbandry pro- 

 vides a large wages fund and a large supply of food, 

 who substantially assists the nation's balance of trade, 

 and who, in doing so, has admittedly to incur con- 

 siderable risks, should be taxed at the same rate as a 

 farmer who adopts a system equally or more advan- 

 tageous to himself, but of far less value to the com 

 munity. (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. 



