INTRODUCTION 13 



number of farmers who are interested in the thorough 

 examination of their costs of production to undertake, for 

 at least a certain period of time, the recording and analysis 

 of their expenditure by exact methods. 



Not only is a standard system of cost analysis essential 

 to the determination of comparative costs in this country, 

 but it is also demanded to enable comparisons to be made 

 between Home costs and those of the Dominions and of 

 Foreign Countries whose products compete in our markets. 

 In many cases it is their costs, and not our own, which are 

 the determining factor in fixing market prices. In the case 

 of wheat-production, for example, the exploitation of virgin 

 soils, with the aid of railway development and labour- 

 saving machinery, may drive the price of wheat down below 

 the home cost, through over-production, as was the case in 

 the early nineties, or abnormal conditions combined with 

 transport difficulties may lift the price above that which 

 might be regarded as necessary in order to secure a fail- 

 reward to the producer, as was the case in the early years of 

 the war ; but in the long run the determining factor is the 

 cost of production in those countries which constitute our 

 main sources of supply, so that accurate information on 

 this point is of vital importance not only for the guidance 

 of individual agriculturalists but also in the framing of 

 national agricultural policy. 



