QUESTIONS OF PRINCIPLE 45 



a local demand it will pay a farmer better to sell hay rather 

 than to produce milk, and one of the main functions of 

 book-keeping is to enable him to make a decision on such 

 points as this. But he cannot expect to have it both ways ; 

 if he sells hay he cannot produce milk, and vice versa. Many 

 farmers contract at summer prices for their winter's supply 

 of feeding-stuffs, but a man who has bought linseed cake 

 at a pound per ton less than the price current at the time 

 when he is consuming it would hardly think of charging it 

 to bullocks at any other price than that which he actually 

 paid, and it is this figure, the actual cost to him, which must 

 be the measure of the value of all raw materials, whether 

 they be bought in the market, or whether, for the sake of 

 convenience and economy, they be grown on the farm. 



The mistake of valuing crops consumed on the farm at 

 their supposed market value instead of at cost price is so 

 generally made 1 as to call for the fullest discussion and 

 consideration by those engaged in cost determinations. It 

 arises partly, no doubt, from a want of clear thinking on the 

 question of what is the cost of an article, but mainly from 

 the lack of adequate records on the farm. In the absence 

 of information as to what he has paid for his hay or for his 

 roots in the process of their production the farmer turns 

 once again to the market in order to fix their value, and 

 the market price of hay at the present time, when a crop 

 costing probably some 80s. per ton to produce will sell 

 readily for 12, 2 is an indication of the magnitude of the 

 error which this system of valuation may introduce. 



A difficulty which presents itself in this connexion is 

 that of how to value the parts of a crop produced simul- 

 taneously by the same expenditure of capital and labour, 

 but used separately. For example, how is the cost of 

 a wheat crop to be divided between the grain and the straw ? 

 The practice advocated in the earlier edition of this book 



1 See, for example, G. F. Warren in Farm Management, p. 55, where he refers 

 to the * absurd practice of some institutions of charging feed to animals at the cost 

 of producing it rather than what it can be sold for, less the cost of marketing '. 



2 1919. 



