H2 DEPENDENCE OF ARABLE FARMING 



farmer continues to draw the bounty or it is passed on 

 to the landlord, the prime fact remains that the State 

 pays something for which it receives no return. Indeed, 

 the whole of this fundamental objection to bounties or 

 duties turns on the question of rent. If certain land can 

 only be brought under arable cultivation by the opera- 

 tion of bounties or duties, all the land that had already 

 been profitable as arable receives an unearned incre- 

 ment which in time reaches the landowner, because as 

 the profit-earning power of the land is enhanced its 

 letting value will rise correspondingly. Rent, in fact, 

 represents the margin between the value of the produce 

 and the cost of production in its widest sense, including 

 the remuneration the farmer expects for his manage- 

 ment and the use of his capital. The changes in rental 

 may lag behind the changes in the value of the produce, 

 but ultimately the adjustment will be effected under 

 the pressure of the competition for the good land. 

 Here is the prime difficulty attaching to either protec- 

 tive duties or bounties on agricultural production, that 

 land is of unequal value and that the owner eventually 

 receives all the benefit when the land is capable of 

 producing at a profit without assistance. 



I am only aware of one method of meeting this 

 objection — that the State should become the universal 

 landowner, and so get back any increment in value 

 brought about by its own action. The State might, in 

 fact, give the landowner security for an annual income 

 equal to the present rental and take itself the fluctua- 

 tions in value brought about in one direction or other 

 by its own action, by foreign competition, or by the 

 growth of the community. There is nothing essentially 

 confiscatory or unjust in such an arrangement, and it 



