42 AGRICULTURAL ECONOMICS 



unquestionably some bad practices on the part of the tobacco 

 buyers which were improved as a result of this experience ; but 

 it was, fundamentally, a victory of economic forces over the 

 inertia of the farmers. The economic fact of lower cost of 

 production in a large area capable of supplying the demand 

 forced the tobacco growers to transfer their activities from the 

 areas of high cost to the areas of low cost. 



We have dwelt at considerable length upon the economic 

 forces which determine prices because the relative prices of 

 products and their relative costs of production determine what 

 the farmer should produce if he would win maximum profits 

 as a result of his farming operations. 



The cost of production is determined by a great number of 

 things all of which will be taken up as we proceed to study the 

 problems of farm organization with a view to securing a maxi- 

 mum total margin between cost and price. One thing should 

 be remembered, however, that the same general economic 

 principles underlie the elements of costs which underlie the 

 prices of products. What is to the farmer cost of production 

 is to the laborer the price paid for his service. What is cost of 

 feed, seed, etc., is also price. What is cost of using land is the 

 competitive price paid for the use of the land. Thus it is that 

 value is at the bottom of all our considerations in agricultural 

 economics, whether viewed from the standpoint of cost or 

 price. What we are needing as farmers is to learn how to ad- 

 just ourselves to price forces in such a manner as to get the 

 greatest satisfaction for the effort put in, consistent with na- 

 tional welfare, and when viewed through a series of years. 



