COST OF PRODUCTION 225 



Another difficulty arises from the fact that the varying 

 nature of the soil in different localities together with 

 transportation and other differences gives rise to varying 

 costs of production. Many critics consider this difficulty 

 as almost unsurmountable, and it is put forward as a 

 strong reason why no fixed price should be stated, just 

 as if this varying cost of production was itself a factor 

 in the determination of prices in the immediate future. 

 What, it may be asked, has been the position of pro- 

 ducers in the past when at any one time there has been 

 approximately one price in all markets of the country, 

 irrespective of the varying costs of production? 



5. Previous Work in Estimating Cost of Production. 



Very little reliable work has been done in this matter 

 up to the present, although many farmers are ready to 

 make a hazardous guess at the question, and to maintain 

 with vehemence that it is unprofitable to produce and 

 sell at less than 5s. or even 6s. per bushel. The New 

 Zealand Farmer, a stock and station journal, in a recent 

 issue,* arrives at this conclusion, in a discussion of the 

 question of the fixation of price by the Government soon 

 after the outbreak of war. But such estimates cannot 

 be regarded as truly representative, and in reality 

 are only speculative and with no absolutely reliable 

 foundations. 



Two estimates of interest, however, have been brought 

 under notice. These estimates are the result of wide 

 spread experience, but they do not rest on a detailed 

 investigation over a series of years. Moreover, the 

 method employed is to isolate the pursuit of wheat 

 production from other pursuits, and argue from this 

 alone, irrespective of the influence of occupations other 



*November, 1914. This was before the high prices of war 

 conditions were operative in raising the cost of production, as 

 is commonly alleged now. 



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