FARMING AS A BUSINESS. 149 



The above examples illustrate the case for cost accounting. It 

 is realised, of course, that farming is a compUcated business, and 

 that the farmer has not the freedom of the manufacturer in the 

 direction of closing down unprofitable articles of production ; 

 yet a good deal can be done, within certain limits, to develop the 

 system of farming in the direction of the more profitable lines, 

 given a knowledge of the financial results obtained in each pro- 

 ductive department of the farm. The farm records and analysed 

 costs of each important product enable the farmer to judge of 

 the relative financial advantages of various farming processes 

 in a way that neither scientific knowledge nor practical experience 

 can do unaided. He can test the efficiency of various forms of 

 power ; he can check the management of horse labour by the 

 record of idle days and their distribution throughout the season ; 

 he can check his direction of manual labour by an examination 

 of the percentage cost of labour in any total product-cost when 

 compared with other published results for the same product or 

 with the results of former years on his own farm ; he can check 

 the efficiency of feeding and manuring ; he can keep control of the 

 issue and use of materials of every kind, feeding stuffs, manures, 

 tools and parts, &c., and thus prevent their careless use and 

 consequent waste ; he is provided automatically every year with 

 a cost valuation of all the live and dead stock, tillages, &c., on 

 the farm. Briefly, cost accounts furnish the only reliable means 

 by which a man can satisfy himself that losses in certain depart- 

 ments are not being incurred unsuspected because covered by the 

 profit of other departments, and also the means by which to 

 reduce costs by the better organisation of production within 

 departments, so as to turn unprofitable ones into paying enter- 

 prises and to make successful ones more successful still. The 

 work pubUshed by several Institutions on the cost of milk pro- 

 duction is known to most people and may therefore be cited by 

 way of illustration. Examination of the analysed cost in many 

 herds showed a remarkable variation between the best and the 

 worst; in some cases bad results {i.e., high costs) were due to 

 low milk yields, in others to expensive feeding, in others to faulty 

 management of labour ; but in every case the cause or causes of 

 the poor results were only ascertained when all the costs of pro- 

 duction were available for analysis and comparison. 



The great advantages resulting from the adoption of a proper 

 method of cost accounting have been emphasised in the above 

 paragraphs, in order to show that the time that has been 

 and is being spent at the Oxford Institute in devising methods 

 which will be adequate to serve the purpose in view is fully 

 justified. For although at first sight it may appear a compara- 



